THE BOURSE WHISPERER: Cleveland Mining Company (ASX: CDG) has received firm commitments from institutional and sophisticated investors to raise $3 million through a placement of 25 million ordinary shares priced at 12 cents per share.
Funds raised include $100,000 from one of the company’s directors, Russell Scrimshaw, who is set to take over from Don Bailey as company chairman.
“This capital raising allows Cleveland to continue to ramp up production at the Premier gold mine and increase the efficiency and profitability of the operation over time,” Cleveland Mining managing director David Mendelawitz said in the company’s announcement to the Australian Securities Exchange.
“We are pleased with the significant support for the Placement from existing shareholders, new investors and broking firms.
“We believe these relationships will provide ongoing support for Cleveland as it executes its growth strategy of developing low cost mines in Brazil, starting with the Premier operation.”
Cleveland indicated it intends to use the proceeds of the Placement for both working capital and capital works that will further the development of the Premier gold mine in Brazil.
These capital works will include:
1. Procurement and installation of a new primary crushing circuit to replace the contract crusher that has been demobilised from site;
2. Commencement of pre-stripping of waste over the higher-grade Metago pit at Premier; and
3. Upgrading the process water supply to match the newly-optimised ball mill.
The company has also earmarked approximately $400,000 of the funds to repay a loan facility that was established and drawn in late 2012.
As a result of the Placement, Cleveland said it will not draw down any further from the Investment Facility provided by Baycrest Capital.
The company explained it is able to do so without cost or penalty.