The price at which the shares are to be placed will be at 6.5 pence per share. The placing is being conducted through an accelerated book building process to be undertaken by Peel Hunt LLP acting as sole bookrunner.
The books for the placing will open with immediate effect.
Shanta Gold is also pleased to announce that it has reached a conditional silver streamlining agreement of silver by-product with the holders of the $25 million senior unsecured subordinated convertible loan notes for a subsidiary of the company (Silverback Limited) to purchase $10 million of the notes and to extend the term of the remaining notes by two years to April 2019 with a concurrent increase to the coupon from 8.5% to 13.5%.
The placing and the silver streamlining agreement provide Shanta Gold with a significant degree of financial flexibility as it reaches peak capital expenditure at the New Luika gold mine during 2016, assisting the company to execute its base case mine plan, undertake the underground development of New Luika and to progress satellite deposit exploration;
Following completion of the placing, Shanta Gold intends to undertake an open offer for up to €5 million to enable existing shareholders not participating in the placing to participate in the fundraising on the same terms.
“The proposed placing and the silver stream agreement, together with the proposed acquisition of $10 million of loan notes and restructuring of the convertible debt, would significantly strengthen Shanta Gold’s financial position as the company progresses the underground development at our flagship New Luika gold mine,” says Shanta Gold CEO Toby Bradbury.
“In addition, the proposed placing and the silver stream agreement provide the financial headroom for the continued exploration of the satellite deposits across our highly prospective licence area as we continue our strategy of adding further ounces to our resources and reserves.”