Australian gold explorer and developer Republic Gold (RAU) rose by as much as 36% today after it said it had raised $5.7 million from a placement of around 76.5 million shares to a group of sophisticated investors at a share price of 7.5 cents.
The company will use the proceeds from the placement to submit an offer for the remaining shares in Republic's 75% owned Mt Carbine Tungsten Project in North Queensland and to fund further drilling here.
In the past few months, Republic has been working towards completing due diligence on the Mt Carbine project, with the current option period expiring later this month.
"The funds raised in this placement put the Company in a strong position to be able to follow-up the due diligence as soon as it is successfully completed and to formulate a viable purchase offer for the project that is acceptable to both parties," said Managing Director of Republic, John Kelly.
The company said following the successful purchase of Mt Carbine, it would use the remaining funds to commence a drilling programme towards redeveloping Mt Carbine as a significant tungsten project.
Tungsten is a metal that is commonly used in light bulb and TV filaments and electrodes because it has a high melting point and can be drawn into a very thin wire.
Republic said that with tungsten prices remaining strong, developing the tungsten aspect of Mt Carbine would be the fastest route towards generating cash flow.
The company also announced today that Mr Neb Zurkic, a world-class geologist, had been appointed as the new Technical Director.
"The Directors see this appointment as a significant coup for the Company given the calibre of Mr Zurkic as a geologist and his worldwide experience," said Mr Kelly.
"The addition of Neb to the Republic team sees Republic with a very powerful geological team, unusual for a small company."
Republic gold rose by three cents to reach 14 cents by mid-afternoon.
