Southern Gold and Integra become good neighbours

THE BOURSE WHISPERER: Southern Gold has executed a Share Subscription Agreement with Kalgoorlie neighbour Integra Mining.

Integra has agreed to take a placement of Southern Gold shares equal to 10 per cent of the expanded share capital at five cents per share.

In parallel with the Integra share placement, Southern Gold said it intends to offer eligible shareholders the opportunity to participate in the fund raising through a non-renounceable pro rata rights issue to raise up to $3 million.

Southern Gold has earmarked the funds raised from the Integra share placement to advance current evaluation studies on development of the company’s Cannon gold resource.

The company expects the majority of funds raised from the proposed rights Issue will be spent on near-Cannon resource exploration and regional exploration of the Bulong project, also in Western Australia.

 

Sketch map showing Southern Gold’s tenement package and proximity to
Integra’s tenement package and nearby gold processing facilities.
Source: Company announcement

 

“This initial business relationship with Integra Mining is seen as a key step forward in realising value from our exploration success at the Bulong gold project,” Southern Gold managing director Nanette Anderson said in the company’s announcement to the Australian Securities Exchange.

“The funding premium to the current share price highlights the value placed by our industry peer on the high quality and potential of the Cannon gold resource; these are near surface gold ounces which warrant economic evaluation.

Southern Gold acknowledged the commercial success Integra has had with the exploration and recent development of several nearby gold resources.

“We see a strong business synergy and added value in our relationship with Integra in the evaluation and possible development of the Cannon gold resource,” Anderson said.

Integra Mining managing director Chris Cairns the transaction with Southern Gold is in keeping with his company’s strategy of growing its gold business and generating shareholder value.

“We see Southern Gold as a solid investment with real opportunity for near-term gold production along with a prospective tenement portfolio nearby to our operations,” Cairns said.

Integra has agreed, pursuant to the Share Subscription Agreement to take up its full entitlement under the proposed rights issue subject to certain conditions.

If the proposed rights issue is not fully subscribed, Integra will have the right to elect to underwrite the shortfall to a level agreed by Southern Gold.

In the announcement Southern Gold said full details of the proposed Rights Issue are expected to be announced in early February 2012.