Peninsular Gold will use US$20 million raised from the issue of convertible loan notes to cover construction and commissioning of the Raub Carbon in Leach (CIL) plant in Malaysia.

Peninsular has entered into an agreement with Amstel Securities which will see Amstel place the convertible loan notes with a major US investment bank.

As well as the Raub plant, the funds will also be used to maintain the momentum of the company's ongoing exploration programs. Some funds will also be allocated for working capital and the repayment of existing debt.

Peninsular Gold chairman and chief executive Dato' Sri Andrew TY Kam says: "With this financing the Raub CIL project is now fully funded to production, which we anticipate will be achieved before the end of 2008. That we were able to raise US$20 million, from a single institutional investor, is a significant vote of confidence in the company's potential to grow its resource base and to become a major gold producer in the region."

The Raub CIL project is projected to produce about 25,000 ounces of gold/year at a cash cost of less than US$200 per ounce. Peninsular also has ongoing exploration programs in the vicinity of the Raub project, which is located within a historic mining district with documented historic production of more than 1 million ounces of gold.