Crater Gold Mininghas coordinated a two-stage capital raising of Aus$3.4 million which helps it move towards the target of positive cash flow at the High Grade Zone of the Crater Mountain Gold Project in Papua New Guinea.
The ASX-listed company hopes the improved funding will result in achieving positive cash flow at the turn of the year.
This capital raising is made up of two tranches with the first tranche of Aus$1.3 million issued to a selection of international institutional investors and family offices. The second tranche of Aus$2.1 million will be issued to Freefire Technology Limited on the same terms, thereby maintaining Freefire’s 62% holding in the company.
The first tranche of the Capital Raising constitutes a placement of 16.25 million shares at a price of $0.08 per share to Australian and global shareholders. This has been carried out under the company’s existing placement capacity.
The second tranche constitutes a proposed placement to interests associated with company chairman Sam Chan and Freefire Technology, which currently hold approximately 62% interest in the company. As a result of the first tranche, Sam Chan and Freefire’s holding will be diluted.
The proposed placement of approximately Aus$2.1 million to Freefire will bring the total capital raising to A$3.4 million and retain Freefire’s interest at 62%.
The second tranche requires shareholder approval and a Notice of Meeting is being prepared. The Aus$2.1 million placement will be substantially funded by the discharge of outstanding debts to improve the balance sheet of the company and its financial standing.
Sam Chan says, “We welcome the support of new shareholders at this exciting point in Crater Gold’s evolution from a gold explorer to a gold developer/producer.
“In this difficult funding environment, we believe this is a vote of confidence in our High Grade Zone project and management team. We see considerable growth in our future cash flows.”