LONDON (Alliance News) - Orogen Gold PLC Tuesday said it has completed an agreement with DEM Geosciences SAL for the provision of drilling services to Orogen in return for equity in the company.
The AIM-quoted gold exploration company said it has agreed an option to contract up to 10,000 metres of drilling to be completed in 2014 and 2015 at a fixed price.
The company will pay roughly 55% of direct drilling payments to DEM Geosciences in equity, with subscription shares being provided at an issue price of 0.2 pence per share in stages, following the completion of certain contracted drilling milestones.
Orogen Gold said the total consideration per metre is at a market competitive price and at an overall discount to the cost per emtre of the company's most recent drilling programmes.
"We view the agreement, which prices the shares to be issued at a substantial premium to the recent share price, as a vote of confidence by DEM in Orogen over the medium to longer term," Chief Executive Ed Slowey said in a statement.
Orogen Gold shares were up 15% to 0.155, putting it in the top five AIM All-Share risers during early trading on Tuesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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