Cleveland completes $10M capital raising

THE BOURSE WHISPERER: South America-focused Cleveland Mining Company has completed a $10.1 million placement to sophisticated, professional and institutional investors.

The placement will result in the issue of 29.7 million new ordinary shares at a price of 34 cents per share.

A large portion of the shares have been allocated to Chinese businessman Wang Zhe, who is principal of private Chinese steel mill group Aosen Steel, a steel group based in the Hebei province.

Zhe has acquired a cornerstone interest in the company of 12 million fully‐paid ordinary shares at the 43 cent issue price for $4.08 million.

The issue to Zhe is subject to Cleveland shareholder approval at a meeting expected to be held during late October.
The remaining 17.7 million fully‐paid ordinary shares are to be issued to selected sophisticated, professional and institutional investors to raise the additional $6.02 million before costs.

“The success of this raise is a vote of confidence in the company’s future and an acknowledgment of our performance up to now,” Cleveland Mining managing director David Mendelawitz said in the company’s announcement to the Australian Securities Exchange.

“Our strategy has focused on first developing company’s capabilities to operate in what it believes to be the best commodities and jurisdictions for profitable mining: that is, gold, copper and iron in Brazil and Chile.

“Cleveland now has a large, capable South American team, an excellent project portfolio and significant access to further opportunities.

“Gold production is fast approaching at the Premier mine and the Company enjoys the clear support of numerous financial heavyweights.”

Cleveland said it will use the funds raised from the placement to complete the development of its Premier gold mine in Brazil.

The monies should augment working capital, and enable fast‐tracked installation of a cyanide CIL plant at Premier, where Cleveland is preparing to install a gravity recovery circuit.

“While our approach is atypical compared to other juniors, we believe that this strategy has readied Cleveland for a very exciting period of development,” Mendelawitz said.

“We are always mindful of shareholder dilution associated with equity raises.

“In these unprecedented times of economic instability, we feel that any such shareholder dilution is counterbalanced by the security of a strengthened balance sheet and the strong support of a friendly, growth‐orientated Chinese steel group that wishes to support us to build a successful mining house in South America.”