Resolute Mining (LON:RSG) have announced a fundraising plan to pay off a loan on Tuesday morning. The firm said that it is raising AUD196 million, which will be broken down into three segments.
The firm will initially place 132.7 million shares at AUD1.10 each to raise the AUD146 million, and this will close on Tuesday.
Resolute have said that they will place 22.7 million new shares at the same price to raise AUD25 million. It will also offer a share purchase plan to shareholders in Australia and New Zealand, with an individual limit of AUD30,000, to raise the last AUD25 million.
The gold miner did note that the price offered does see a 6.4% discount off its closing price in Sydney of AUD1.175.
As a a result of the share placing plan, in London shares have dipped 6.40% to 60p on the announcement. 21/1/20 12:11BST.
The funds raised will be used to repay a $130 million bridge facility provided by Taurus Funds Management Pty Ltd, which is due for repayment at the end of January.
This funding was used to purchase Toro Gold Ltd, which included the Mako gold mine in Senegal.
Resolute’s Managing Director and CEO, Mr John Welborn said: “The ability to entirely repay the Toro Gold acquisition facility will save Resolute extension fees and interest payments. More importantly, today’s equity raising will support and enable the complete refinancing of our debt facilities during the current quarter. Completion of the equity placement, and the refinancing of our senior syndicated loan facilities, will enable the Company to simplify its capital structure and facilitate the retirement of debt facilities provided by Taurus.
“The SPP provides our eligible shareholders, along with the institutional shareholders who are participating in the placement, the opportunity to increase their shareholding in Resolute on attractive terms at a pivotal point in the Company’s life cycle. Strong production guidance, a significant reduction in capital expenditure, operating assets which are now generating positive cashflows, and a stronger balance sheet with a greatly reduced debt burden, provides Resolute shareholders the opportunity for a positive re-rate.”
Busy start to 2020 for Resolute
Last week, Resolute announced that they have sold their Ravenswood gold mine in Queensland.
The sale was confirmed after rumors hit the market last Monday, however shareholders have been fully notified with confirmation.
Last week, it was announced that Resolute were in talks with private equity firm EMR Capital Management Ltd, and the mine has been sold to EMR Capital Management and Golden Energy and Resources (SGX:AUE).
Resolute have said that they will receive AUD100 million in cash and notes for the initial sale of the mine.
Subject to further terms of the deal, a further AUD200 million could be sent Resolute’s way dependent on gold production figures and gold prices.
Notably, the firm also agreed a power supply deal with Aggreko PLC (LON:AGK) is giving the chance for Resolute to make good progress.
The plans come into action following an ensured effort to lower operating costs for Resolute, and the new plans will help reduce power costs by around 40%.
The share placing plan gives a good opportunity for Resolute so manage their debts in an adequate manner, and this should allow strong development across 2020 for the firm.