Phoenix raises $20M to accelerate Castle Hill

THE BOURSE WHISPERER: Phoenix Gold (ASX: PXG) has completed a Placement of approximately 66.7 million shares at 30 cents per share to raise $20 million.

The Placement received strong support from both existing shareholders and enabled a number of new institutional investors to be added to Phoenix’s register.

The offer price of 30 cents per share represents a 13 per cent discount to Phoenix’s last trading price on 18 October 2012.

Phoenix said it would also be offering eligible existing shareholders the opportunity to participate in a Share Purchase Plan (SPP) to raise up to $2 million.

The SPP shares will be offered to existing shareholders at the Placement price of 30 cents per share.

“Drilling success to date at Castle Hill and Broads Dam has demonstrated that the more drilling we do, the bigger the project becomes,” Phoenix Gold managing director Jon Price said in the company’s announcement to the Australian Securities Exchange.

“With shareholder support and encouragement it has become apparent that we must accelerate the drilling programs at our flagship projects to grow the resource and reserves as fast as possible.

“With these funds raised today we will triple the drilling activity at Castle Hill and Broads Dam and fast track the DFS in parallel.

“This work will put us in a strong position to be able to make a sound investment decision in the December Quarter of 2013 to develop the projects and construct a stand-alone processing plant at Castle Hill.”

 

Source: Company announcement

 

Phoenix indicated the Funds from the Placement and SPP will be used to accelerate the company’s planned drilling program over the next 12 to 15 months and to complete a Definitive Feasibility Study.

The company has planned an escalated drilling program of approximately 217,000 metres over its projects.

This will be comprised of:

–    Resource extensions along strike and at depth;

–    Greenfield drilling of new targets; and

–    Infill and sterilisation drilling to support the DFS.

This activity will involve up to four drilling rigs and increased field work.

Phoenix said it expected to increase both resources and reserves while it completes its DFS.