LONDON (Alliance News) - Noricum Gold Ltd Thursday issued a substantial amount of shares at a discounted price in order to move its Bolnisi copper and gold project in the Republic of Georgia into production in the second half of 2016.
The gold miner said it raised GBP1.0 million after issuing 1.25 billion new shares in the company at a price of 0.08 pence per share - an 11% discount to the closing price of Noricum shares on Wednesday of 0.09p.
Noricum shares were trading up 2.2% to 0.920p on Thursday morning.
In addition to that substantial placing, Noricum issued a further 63.0 million new shares to consultants of the company to settle fees owed. Those shares were also issued at 0.08p each.
The 1.31 billion shares issued Thursday represent around 32% of the company's enlarged issued share capital, with a total of 4.00 billion shares in issue following the transactions.
The 1.25 billion shares were issued to existing and new investors, with all but one of Noricum's board members also acquiring shares in the process.
Chairman Michael Hutchinson purchased the most, acquiring 31.3 million shares to up his stake in the company to 0.9%. Non-Executive Roderick McIllree was the only board member not to purchase any shares in the latest round of fundraising.
Managing Director Gregory Kuenzel, Executive Director Martyn Churchhouse and Exploration Director Jeremy Whybrow all acquired 6.3 million shares each, pushing their stakes up to 0.62%, 6.49% and 0.27% respectively.
Senior Non-Executive Director Marcus Edwards-Jones purchased 5.0 million shares to push his stake up to 0.19%.
The funds will be used to try to get the company into early stage production as soon as the third quarter of 2016, focused on starter pits located at the Tsitel Sopeli and Kvemo Bolnisi project areas which lie within the wider Bolnisi project in Georgia.
Ahead of development, Noricum Gold will complete confirmatory resource drilling at both targets. Drilling at Kvemo Bolnisi commenced in December 2015 and is ongoing and once completed, drilling and trenching will commence at Tsitel Sopeli, it said.
As the company is proposing to utilise existing processing facilities, feasibility studies are not required ahead of production, which is the main reason why production could begin so quickly. In tandem with Noricum Gold's drilling activities, metallurgical and process testing is partially complete and mine planning and pit design will now commence.
"We acquired Bolnisi in July 2015 in recognition of the exciting potential it presented to deliver production and cash flows within a short timeframe, and with these funds now in hand we are on track to realise this in the near term," said Kuenzel.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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