Still in mining and Beaconsfield Gold wants to raise $5 million from shareholder, partly to move outside Tasmania.
The gold producer told the ASX yesterday stock exchange the money from a share purchase plan would enable it to bring forward its Ararat/Stavely project.
It also told the ASX that its debt has nearly been extinguished after repaying around $8 million.
The plan develop its interest in the Ararat copper and gold mine, in Victoria, and the nearby Stavely mine would be the first time the company has expanded outside Tasmania.
"Beaconsfield Gold intends to rapidly progress the Ararat/Stavely copper-gold project," the company said in the statement.
Part of the money raised from the share purchase plan will also be used to develop and explore the Beaconsfield Mine.
Under the purchase plan eligible shareholders will be able to purchase $1,000 to $15,000 worth of shares at 15 cents per share, a slight discount to Tuesday’s opening price of 16 cents per share.
"This represents a 10.2 per cent discount to the volume-weighted average price for Beaconsfield Gold shares on the ASX (Australian Securities Exchange) over the previous five trading days of 16.7 cents," the company said.
The closing date for investors to apply to participate in the share purchase plan is July 3.
The SPP will be capped at a maximum of $5 million and shares will be allocated on a “first-in, first-served” basis.
During the 2009 financial year, Beaconsfield Gold has benefited from improved gold production at the Beaconsfield Mine and a strong gold price.
"Considerable capital has been invested from cash flow to develop the initial mining infrastructure required for the new F21 Zone production area, to construct an additional tailings dam and to commence deep drilling below the existing resources to extend mine life.
"Additionally, repayments of $8 million from operating cash flow have nearly eliminated the Company’s debt facilities.
Capital expenditure required during the 2010 financial year at the Beaconsfield Mine to further develop the F21 Zone will be funded out of mine cash flow.
Exploration opportunities have been expanded. Importantly, entry into the exciting Ararat copper/gold project was recently negotiated, thereby enhancing the potential for Beaconsfield Gold to develop a second mine based on the combined resources at Ararat and the Company’s nearby Stavely tenements in western Victoria.
"Beaconsfield Gold intends to rapidly progress the Ararat/Stavely copper-gold project.
Raising modest additional capital at this time will enable Beaconsfield Gold to bring forward realisation of the Ararat/Stavely opportunity as well as accelerate development and exploration opportunities at the Beaconsfield Mine that will optimise the long-term future of the Company.
Beaconsfield shares dropped 9%, 0r 1.5 cents, to 15 cents after the news.
