Through the placement, Teranga Gold has subscribed for 21.2 million fully paid ordinary Gryphon shares at A$0.206 a share for total consideration of approximately A$4.4 million.
This follows the announcement made on 19 June 2016 that Teranga Gold had signed an agreement to acquire Gryphon as part of the all share transaction, expected to close in October.
The capital from the placement will be used immediately to start the resource conversion drill program and plant optimisation studies required to complete a fully optimised and de-risked feasibility study by the first half of 2017 and to update the tailings storage facility design and relocation action plan required as a result of the decision to move forward with a carbon-in-leach plant.
Richard Young, President and CEO of Teranga Gold says that accelerating the development of the Banfora gold project, in Burkina Faso is a top priority for the company following the closing of the proposed Gryphon acquisition.
“In order to maximse our return and mitigate project risk, construction at Banfora needs to commence following next year’s rainy season,” says Young.
“Launching this process in advance of closing the proposed Gryphon acquisition, allows for a target date of fall 2017 for commencement of major construction, with a targeted first pour in the first half of 2019,” he concludes.
As a result of the placement, Teranga Gold owns approximately 5% of Gryphon’s issued shares.