Millennium Minerals (ASX: MOY) will raise A$25.5 million for the development of the Nullagine Gold Project, after launching a fully underwritten, non‐renounceable rights issue.
The one for one rights are priced at $0.017, with an attaching free option exercisable at $0.03 - which expires 15 months from the closure date of the rights.
Importantly - with the funding from the rights, Millennium anticipates that the company will now have funded the construction of the 1.25 million gold ounce Nullagine Gold Project, located in Western Australia’s East Pilbara region.
The funding in place also includes contingency provisions.
On completion of the current issue, the company will have cash of $41 million, along with $45 million in arranged debt and lease finance facilities, when financial close is achieved.
Brian Rear, chief executive officer, commented “With construction underway, the proceeds from the raising will ensure the development of the mine and construction of process plant and supporting infrastructure remains on track for completion in the third quarter of calendar 2012.
"Construction activity is focused on preparing the access road to the mine site and the early installation of the accommodation village and associated buildings.
"Detailed engineering is complete and tendering of the remaining key elements of the construction phase is well advanced.”
Patersons Securities Limited has been appointed as Lead Manager and Underwriter.
The project design
Millennium has indicated that a 14 month construction period is required for the 1.5 million tonne per annum gold processing plant, 145 person accommodation village and associated infrastructure at an estimated capital cost of $73 million - before contingencies.
Being supported by the current very strong gold price, the planned mine life is 7.5 years to produce 505,000 gold ounces.
Under the current mine plan, peak gold production in the early years will be annually around 80,000 ounces.
Millennium has also provided for expansion in the process plant design and studies are in progress to assess the early achievement of increasing gold output from commencement of commercial production.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/19069/millennium-minerals-funds-construction-of-nullagine-with-a255m-underwritten-rights-19069.html
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