Teranga Gold Corporation has entered into agreements to offer a total of 62 000 000 common shares of the company at a price of $1.05 per common share for aggregate gross proceeds of approximately $65 million.
Under the agreements, 32 500 000 common shares will be issued on a bought deal basis at a price of $1.05 per common share through a syndicate of underwriters co-led by RBC Capital Markets and Cormark Securities – for gross proceeds of approximately $34 million.
An additional 29 500 000 common shares will be issued on a non-brokered private placement basis at the same price of $1.05 per common share to Tablo Corporation for gross proceeds of approximately $31 million.
Following the completion of the offering, Tablo Corporation, controlled by David Mimran, will hold a total of 92 876 260 common shares, or 17.4%, of Teranga’s issued and outstanding common shares (calculated on a non-diluted basis and not including exercise of the over-allotment option).
Teranga plans to direct approximately $30 million of the net proceeds to construction readiness activities for its newly acquired Banfora gold project in Burkina Faso, West Africa.
Such activities could include reserve development drilling, updating scientific and technical report and optimisation studies, the start of village relocation and early engineering works.
The company intends to use the remainder of the net proceeds to fund exploration activities associated with its Banfora, Golden Hill and Gourma gold projects in Burkina Faso and for general corporate purposes.
However, Teranga cautioned that the actual allocation of the net proceeds may vary in accordance to future developments in the company’s mineral properties or unforeseen events.
With regard to the public offering, the underwriters will have the option, exercisable in whole or in part, at any time up to 30 days following its closing, to purchase up to an additional 4 875 000 common shares at the offering price to cover any over-allotments. In the event that the over-allotment option is exercised in its entirety, the offering’s aggregate gross proceeds will be approximately $70 million.