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(Alliance News) - Serabi Gold PLC on Wednesday announced the issue of convertible loan notes to raise cash for the Coringa project in Brazil.
Shares were 4.0% higher on Wednesday afternoon at 79.00 pence each.
Serabi will be raising USD12 million by issuing the notes to shareholder Greenstone Resources II LP, which already holds a 25% stake in the company. If Greenstone decides to covert the notes into shares, its stake would rise to 38%.
The cash raised will be used to develop the Coringa project. Coringa is located in the state of Para in Brazil, and has indicated mineral resources of 195,000 ounces of gold and inferred resources of 346,000 ounces.
"This is a major endorsement from Greenstone and strong confirmation of the belief of Greenstone and its management in the longer term prospects for Serabi and the potential growth that not just Coringa will bring to the company but can also be generated from the opportunities to expand existing production from the Palito Complex, particularly through successful exploration in and around the Sao Chico deposit," said Serabi Chief Executive Mike Hodgson.
"This is excellent news for the company and now provides us with a platform and security to start moving forward further with the development of Coringa."
Mark Sawyer, senior partner at Greenstone, added: "We have been very pleased with Serabi's operational results and the development of its projects since making our initial investment in March 2018. We invested because of our belief in the company's ability to grow and develop its asset base and saw the opportunity the Coringa project presented as the first leg of this growth.
"We are therefore pleased, at this time, to be able to provide the financial support to the company that allows it to significantly advance Coringa, whilst continuing to increase gold production from the Palito operation."
Serabi produced 40,101 ounces of gold in 2019 from Palito, 8.1% higher than the previous year.
By George Collard; georgecollard@alliancenews.com
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