EurOmax to raise up to $6.3 mln for Ilovitza drill program

EurOmax Resources (CVE:EOX)(OTCQX:EOXFF) said Thursday it's raising up to $6.3 million in a non-brokered private placement of up to 42 million common shares at $0.15 each.
The company said it intends to use the proceeds to fund the first stage of a development program at its Ilovitza copper-gold porphyry project in Macedonia and for general working capital purposes.
EurOmax has three core properties in Bulgaria, Serbia and Macedonia, and is transitioning from a pure exploration play, currently listed on the TSX-Venture Exchange, to an exploration and development company with a London listing in early 2013.
"We'll certainly not abandon Toronto," EurOmax's chief executive Steve Sharpe told Proactive Investors.
"We may think about a listing on the main TSX board at some point but it's certainly the intention to keep the dual listing.
"There's a very simple rationale behind this - we don't believe EurOmax gets the appropriate value for the ounces that it has.
"There's an enormous amount of value in the North American market: the TSX and the TSX-Venture have a deep understanding of mining.
"In 5 years' time we want this to be a European gold producer with a principal listing in London. There's a unique place in the London market for a European gold producer."
Regarding the newly-announced private placement, certain insiders of the company may acquire securities and there are no warrants in this offering, which is subject to the approval of the TSX Venture Exchange.
EurOmax has also granted a total of 8.63 million stock options to directors, officers, consultants and employees of the company, which are exercisable for five years at a price of $0.20 per share. Insiders of the company were granted a total of 5.2 million options.
Sharpe, who will be based in London, recently joined EurOmax from European Goldfields, which was acquired by Eldorado Gold (NYSE:EGO) (TSE:ELD) for $2.5 billion in late 2011.
As chief executive, Sharpe outlined the initial steps in his strategy.
"Our immediate plan is to upgrade the quality of these resources. That will lend additional value to the properties in Bulgaria and Serbia."
Sharpe said that advancing Illovitza would show the market the company has "the wherewithal to advance projects from exploration through to development and production."
Illovitza is EurOmax's most advanced asset. In April, EurOmax unveiled an updated NI 43-101 resource giving an indicated sulphide and mixed mineral resource of 22 million tonnes comprising 224,000 ounces of gold at an average grade of 0.31 grams per tonne (g/t) and 112 million pounds copper at an average grade of 0.23%.
On an inferred basis, the sulphide and mixed mineral resource was 374 million tonnes comprising 3.84 million ounces gold at an average grade of 0.32 g/t and 1.74 billion pounds copper at an average grade of 0.21%.
"Ilovitza is in very close proximity to European Goldfields' flagship Skouries project and our technical review indicates that it bears very similar characteristics.
"It is in an excellent area in terms of infrastructure and the interaction with the Macedonian authorities has been overwhelmingly positive."
EurOmax's Sharpe was also "pleasantly surprised" by the characteristics at Trun, an intrusion-related gold project in Bulgaria.
A January 2011 NI 43-101 report outlined an inferred resource of 2.1 million ounces of gold at the Logo target within Trun.
"At Trun, the work that has been done indicates that it is amenable for phased development. It's the perfect ancilliary project to run alongside Illovtiza.
"It could be characterized as being what Olympias was to Skouries at European Goldfields.
"We're enormously excited about this opportunity. The team we met in country has been outstanding, and the technical ability is first rate."
Sharpe also recognized EurOmax's chief operating officer Mark Gustafson's work on bringing the company to its current stage.
"Also I'd like to thank Mark for his tireless efforts in putting the company into the shape that it is now, such that it is perfectly poised to move up the developmental curve."