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Debt repayment ups IFISA’s stake in Austral to nearly 95%

27th October 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Precious metals developer and explorer Austral Gold on Monday announced that it would repay its outstanding A$61.58-million debt to Inversiones Financieras Del Sur SA (IFISA) through the issue of fully paid ordinary shares, valued at 20c each.

Subject to shareholder approval, ASX-listed Austral would issue IFISA with about 312.5-million shares, resulting in the financier increasing its shareholding from 84.77% to 94.62%.

“Austral Gold’s independent directors have carefully reviewed this proposal and we unanimously recommend the transaction to shareholders. With a strong debt-free balance sheet and growing production profile, Austral Gold is well placed to pursue a number of growth opportunities open to the company,” said independent nonexecutive director Wayne Hubert.

With yearly production now exceeding 50 000 oz of gold equivalent, at an average operating cost of A$630/oz, Austral’s cash flow could be deployed to project expansions, the acquisition of new projects currently under review, or additional equity investments in undervalued precious metals listed companies, Hubert added.

“We are determined to transform Austral Gold into a leading precious metals company focused on South America. This will be achieved through strengthening its balance sheet, attracting more investors to its register, and growing the company’s asset base,” said nonexecutive chairperson Eduardoe Elsztain.

The company's flagship Guanaco project in Chile is a low-cost producing mine with further exploration upside.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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