PERTH (miningweekly.com) – ASX-listed Laneway Resources has announced a A$15-million funding plan to fund the Georgetown gold project acquisition, plant refurbishment, mine development and for working capital.

Laneway on Monday told shareholders that it would undertake a share placement to raise an initial A$2.5-million and would issue convertible notes to raise a further A$12.5-million.

The placement will be done in two tranches, with the first tranche of 236-million shares, priced at 5c each, to be issued under Laneway’s existing placement capacity, raising an initial A$1.18-million.

The company would place a further 264-million shares, subject to shareholder approval, to raise a further A$1.32-million.

For every two new shares issued, the company would also issue one attaching option exercisable at 8c each and expiring at the end of February 2023.

Meanwhile, the convertible notes would have a face value of 7c each and an interest rate of 12% a year, with a maturity date of the end of September 2025. Laneway said on Monday that its largest shareholder has committed to subscribe for A$3.25-million worth of convertible notes, subject to shareholder approval.

Funds will be used to complete the acquisition of the Georgetown project, in North Queensland, refurbish the gold processing plant, fund mining activities and near-term exploration, partly repay short-term borrowings and to fund working capital.

The company has already paid A$1.95-million on the Georgetown acquisition, with a further A$4-million due in early September and a further A$4-million in cash and 100-million Laneway shares and 100-million options due at the start of October.

A final payment of A$6.95-million is expected in January next year, with Laneway to also pay a 1% net smelter royalty on gold produced from the tenements, capped at A$5-million.

The Georgetown assets include a 200 000 t/y processing plant, 17 mining leases and 13 exploration permits over 515 km², a Joint Ore Reserves Committee-compliant resource of 915 000 t for 119 000 oz of gold from five of the prospect areas.

Laneway said on Monday that the refurbishment of the processing plant is progressing well, with wet commissioning under way. The processing of first ore is expected in the last week in August, and first gold pour is expected shortly thereafter.