THE BOURSE WHISPERER: Phoenix Gold (ASX: PXG) has provided some optimism to the smaller end of town with the completion of a Placement of 50 million shares at 10 cents per share to raise $5 million.
Any raising, let alone one for $5 million, has been a difficult task for some of the company’s contemporaries of late and Phoenix was quick to point out this particular raising had been oversubscribed and received strong support from existing shareholders.
The raising enabled a few new institutional and sophisticated investors to be added to the company’s register.
In addition to the Placement, Phoenix indicated it would now be offering eligible existing shareholders the opportunity to participate in a Share Purchase Plan (SPP) to raise up to $1 million, again at 10 cents per share.
The company has earmarked the funds from the Placement and SPP to complete the acquisition of the St Ives 2.3 million tonnes per annum heap leach processing facility.
The company indicated the proceeds will also be used to commence relocation of the plant in line with Phoenix’s obligations, and to provide general working capital.
“The heap leach facility is a key part of Phoenix’s development strategy, enabling the treatment of stockpiled lower grade ore mined from Castle Hill and surrounding projects,” Phoenix Gold managing director Jon Price said in the company’s announcement to the Australian Securities Exchange.
“Advancing this significant component of the strategy will provide us with an important additional source of cash flow over many years.”