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- Gold producer Resolute Mining (RSG) launches a $140 million placement and entitlement offer to strengthen its balance sheet
- The fully underwritten institutional placement will raise an initial $41 million and the underwritten institutional and retail components of the offer will raise the other $99 million
- Additionally, if the retail offer is fully subscribed, a further $60 million may be raised under a non-underwritten component to take the total amount raised to $200 million
- Resolute will use majority of the funds to reduce net debt, with the funds also being used to support its expansion plans for the Syama North operation in Mali
- RSG shares last traded at 20.5 cents on November 9
Resolute Mining (RSG) has launched a $140 million underwritten equity raise to strengthen its balance sheet.
The equity raising comprises a fully underwritten institutional placement and a partially underwritten one-for-1.11 non-renounceable entitlement offer.
All new shares will be priced at 16 cents each which represents a 22 per cent discount to the last closing price and a 23.1 per cent discount to the five-day volume-weighted average price.
The placement will result in the issue of roughly 258 million new shares to raise $41 million.
The entitlement offer includes an institutional and retail component with the underwritten institutional portion set to issue 348 million shares to raise $56 million.
The retail entitlement offer includes up to 646 million shares to raise up to $103 million, of which $43 million is underwritten.
Resolute will use the $140 million to reduce net debt under its syndicated loan facility from US$156 million (A$243 million) to US$65 million.
Under the non-underwritten retail component, in the event the retail offer is fully subscribed, up to a further $60 million can be raised which would take the total amount raised to $200 million.
The company will use the additional $60 million, as well as its cash reserves, to further repay debt, fund general working capital, and support its expansion plan for its Syama North operation in Mali.
The Syama North expansion plan involves drilling and testwork to convert resources to reserves as well as to complete a pre-feasibility study in the new year. This will be followed by a definitive feasibility study expected to be completed in the second quarter.
Resolute Mining said it is now in a “strong position” to pursue a new open pit operation at Syama North.
RSG shares last traded at 20.5 cents on November 9.
