Gryphon Minerals (ASX: GRY) has raised A$58.5 million via a share placement, increasing the company's cash reserves to $100 million, with the funds allowing the company to advance towards development of its Banfora Gold Project in Burkina Faso and for regional West African exploration.
The share placement will comprise the issue of 45 million shares to existing and new Australian, European and North American institutional investors at an issue price of $1.30 per share.
The company will also initiate a share purchase plan, open to all eligible shareholders, to raise up to $10 million at $1.30 a share. The record date is 22 November 2011.
Funds will be used for resource and reserve definition drilling, regional exploration, Definitive Feasibility Studies, procuring long lead items and preliminary site works at the Banfora Gold Project.
Gryphon has begun a Definitive Feasibility Study on the potential for a 3.5 million tonne per annum open pit mining operation to produce in excess of 200,000 ounces of gold per annum.
Earlier this year, Gryphon announced an increase in the Inferred JORC Resource at Banfora to 29 million tonnes at 2.1 grams per tonne for 2 million ounces of gold.
Another plus for the resource is that the majority of it is located between the surface and 100 metres in depth, which is also open at depth and along strike, with metallurgical recoveries of 93%.
The Banfora Project is located in the south‐west of Burkina Faso in a major gold producing district, which hosts Resolute Mining's (ASX: RSG) 11.5 million ounce Syama, Rangold Resources (LON: RRS) and AngloGold Ashanti's (ASX: AGG) 6.5 million ounce Morila and Rangold's 4.2 million ounce Tongon deposits.
The project is easily accessible by road and in close proximity to the town of Banfora and the major city of Bobo Diolasso. Grid power is located approximately 30 kilometres from the eastern boundary of the project.
Regionally within the 1,200 square kilometre project area there remain numerous untested high priority targets which Gryphon will be targeting during 2011 and 2012.
The funds from the share placement will also be used to continue exploration work at Gryphon’s gold projects in Mauritania as well as to meet working capital requirements and potential acquisitions.
Managing director Steve Parsons said despite the challenging short-term market environment, the strong backing Gryphon received from its current institutional shareholder base demonstrates the support for the company’s strategy to become a significant near-term West African gold company.
“These funds will allow us to continue on the path to development at our flagship Banfora Gold Project,” he said.
“They will also allow Gryphon to maintain an aggressive exploration program in highly prospective and under-explored regions of West Africa. Gryphon now holds a dominant and strategic land position of more than 3,600 square kilometres in Burkina Faso and Mauritania”
Cash Advantage
At the end of the September quarter Gryphon had more than $41 million in cash. This latest cash injection means the company is indeed well placed to continue its extensive exploration programs, as well as continue to assess other opportunities in West Africa.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/22452/gryphon-minerals-boosts-coffers-by-a585m-to-progress-banfora-gold-project-22452.html
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