Allied Gold raises A$160m in share issue

Business, Main Stories


ALLIED Gold Ltd which owns the Simberi gold and silver mine in New Ireland province raised more than A$160 million (K380 million) in a shares issue that concluded last week.
The miner announced the highly successful shares purchase last Monday – just two days before the mine was temporarily closed by Mineral Resources Authority (MRA) over safety, health and welfare issues.
However, the company is seeking court ruling on the legality of the closure order and, at the same time, filed a damages claim for A$12 million (K28 million) from an engineering and construction firm in Western Australia.
Last Wednesday, Allied said it received legal advice indicating that the cease work order on Simberi was illegal and had lodged an appeal with the MRA.
At the same time, it launched legal action against Intermet Engineers and Garry Thomas, a former director of Intermet, for breach of contract over construction of gold processing facilities on Simberi Island.
Lodged in Western Australia, the claim is seeking damages of at least A$12 million (K28 million).
The company said it had discussed the mine closure order with MRA which acknowledged that actions resulting from the order by the Simberi Mining Area Association, prohibiting entry to facilities on the site, were illegal.
According to Allied Gold, since operations at Simberi started it has not been advised by any government department of being in breach of its operating permits.
Allied said it would use the proceeds from share sales to finance expansion of Simberi’s oxide plant and use the rest of the funds for general corporate purposes and redevelop the Gold Ridge mine on Solomon Islands which it acquired from Australian Solomons Gold recently.
“Allied Gold Ltd is pleased to announce the completion of its previously announced public offering of 432,840,000 ordinary shares through a syndicate of agents led by Thomas Weisel Partners Canada Inc and Mirabaud Securities LLP, BMO Nesbitt Burns Inc, and CIBC World Markets Inc.
“In connection with the closing of the offering, the agents partially exercised their over-allotment option to increase the number of ordinary shares issued under the offering by 23,859,000 shares (5.5%).
“As a result, a total of 456,699,000 ordinary shares were issued on closing of the offering at a price of C$0.335 (K1) per share (or, for settlement in the UK, ?19.4 per share) for aggregate gross proceeds of C$152,994,165 (K392,494,010).
“The offering was placed primarily with purchasers in the UK, US and Canada.
Based on the Bank of Canada noon exchange rate last Dec 17, this implies gross proceeds from the offering of about UK Pound £88.5 million or A$161.3 million (K383 million),” it said in a statement.
It said processing and mining operations at Simberi had been temporarily suspended and it was optimistic that operations would restart shortly.