REBgold (CVE:RBG) has received a big vote of confidence from mining investor Baker Steel, which will put up more than half of a planned C$2.5mln placing.
The resources and mining fund manager has agreed to pay a hefty premium to the current market price with the new shares being issued at C$0.12 per share.
The placing will consist of C$1.5mln worth of shares and C$1mln from an issue of convertible debentures.
Of this, Baker Steel intends to put up C$1.4mln comprising C$880,000 in shares and C$510,000 of debentures.
Baker Steel is currently REBgold’s largest shareholder with a 17.4% stake.
Mark Burridge, REBgold's chairman, said, "REBgold's ability to secure financing in excess of its immediate needs and at a significant premium to its current share price is testimony to its underlying potential.
“This financing will give the company a strong competitive advantage in pursuing acquisition opportunities in the current market environment. Our investors have also indicated that they would be prepared to stand by further financing as these opportunities arise."
The money will fund development of REBgold's Finnish gold exploration projects and to find other opportunities, it said.
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