Phoenix Gold guaranteed $7 million through underwriting agreement with Patersons

Phoenix Gold (ASX: PXG) has entered into an Underwriting Agreement with Patersons Securities for the exercise of the remaining company options which expire on February 28, 2012.

This agreement guarantees that Phoenix will receive the full A$7.16 million for the options, subject to the terms.

The deal ensures Phoenix will be well funded to pursue the next phase of resource growth, develop a five year mine plan and further stockpile treatment and development of the Catherwood and Blue Funnel gold mines.

Cash generated from the mines and treatment of stockpiled ore will fund further resource growth at Castle Hill and Broads Dam, along with greenfields exploration at Ora Banda.


The significant cash generated from the mines and stockpiled ore treatment will fund further Resource growth at Castle Hill and Broads Dam and Greenfields exploration at Ora Banda.

Phoenix managing director Jon Price said: “The underwriting agreement received overwhelming support from institutional investors. Now the $7 million dollars from exercise of these Options is guaranteed the Company can focus on another successful year in 2012”.

The agreement includes an underwriting fee of 5% of all funds raised pursuant to the underwriting.

Focus on Resource growth
Phoenix is focused on growing the JORC Resources at its projects near Kalgoorlie in Western Australia, and aims to self-fund aggressive exploration through the development of advanced mining projects that will deliver short-term cash flows.

In November this year, the company boosted its total JORC Resources to 29.6 million tonnes at 1.8 grams per tonne gold, for 1.68 million ounces, a 72% increase on the Resource published in the company’s Initial Public Offering prospectus in October 2010.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/23348/phoenix-gold-guaranteed-7-million-through-underwriting-agreement-with-patersons-23348.html