Gold
Shanta Gold and Helio Resources have entered a definitive arrangement agreement whereby Shanta Gold will acquire Helio Resources.

Through this agreement Shanta Gold will acquire Helio Resources’ SMP project in Tanzania which is immediately adjacent to Shanta Gold’s operating New Luika gold mine (NLGM).

Helio Resources’ project consists of an NI 43-101 compliant gold resource consisting of 635k gold oz at an average grade of 2.4g/t. All of these resources are located within 20 km of the Shanta Gold NLGM processing plant.

“The inclusion of the Helio Resources into Shanta Gold’s portfolio strengthens the opportunity to deliver an expansion option for the NLGM and to also potentially extend mine life,” states Shanta Gold CEO, Dr. Toby Bradbury.

“This comes after our recent announcement of the Nkuluwisi resource of 4 Mt for 141k oz at 1.1g/t. NLGM is well established with long term water security and low cost and long life power servicing an established and efficient processing plant,” adds Bradbury.

“After many years of exploration efforts and a number of economic assessment studies it is clear that the best outcome for Helio Resources’ shareholders is to combine with Shanta Gold for the development of Helio’s gold resources on its SMP property in Tanzania,” explains Helio Resources’ CEO, Richard Williams.

“This all share transaction represents a unique opportunity for Helio Resources’ shareholders to participate in the future growth and value creation of the NLGM. We look forward to working with Shanta Gold’s board and management to complete this transaction in a timely fashion,” adds Williams.

Shanta Gold has also announced a proposed capital raising for approximately US$14 million.

The placing by Shanta Gold is being conducted through an accelerated book building process to be undertaken by Peel Hunt acting as sole book-runner. The books for the placing will open with immediate effect.

Certain directors and employees of Shanta Gold have indicated an intention to participate in the placing.

Further, Odey Asset Management, the Shanta Gold’s current significant shareholder has also indicated its intention to participate in the fundraising by way of subscription for new ordinary shares of the company.

Shanta Gold has also accepted a credit approved commitment letter for a new US$50.0 million Investec debt facility to replace the current $40 million Investec debt facility, of which $35.3 million is outstanding, and is negotiating the definitive documentation.