PERTH (miningweekly.com) – Gold miner Resolute Mining has launched a A$196-million equity raise to repay the $130-million Toro Gold bridge facility.

Resolute and Taurus Funds Management have agreed that all outstanding amounts under the Toro Gold acquisition finance facility will now be repaid prior to the due date of January 31.

The Toro Gold finance facility was used to fund the cash portion of the $305-million acquisition of Toro Gold, which held the Mako gold mine, in Senegal.

Resolute on Tuesday noted that an initial A$146-million will be raised through a fully underwritten institutional placement, while an additional A$25-million will be raised through a placement to Resolute’s directors and its largest shareholder ICM Limited, along with a share purchase plan (SPP), to raise an additional A$25-million.

The institutional placement will consist of 132.7-million shares, at a price of A$1.10 each, with the placement to be conducted through a bookbuild.

A further 22.7-million shares, at the same price, will be placed to the company’s directors and ICM, with the directors placement raising a combined A$500 000.

The institutional placement will be conducted under existing capacity, while the shareholder and ICM placement will be subject to shareholder approval.

The offer price of A$1.10 a share represented a 6.4% discount to Resolute’s closing price on January 20, and a 7% discount to the company’s five day volume weighted average share price.

MD and CEO John Welborn told shareholders that the ability to entirely repay the Toro Gold acquisition facility would save Resolute extension fees and interest payments.

“More importantly, today’s equity raising will support and enable the complete refinancing of our debt facilities during the current quarter. Completion of the equity placement and the refinancing of our senior syndicated loan facilities will enable the company to simplify its capital structure and facilitate the retirement of debt facilities provided by Taurus.”

Welborn has further said that the SPP will allow eligible shareholders the opportunity to increase their holding in the gold miner at a pivotal point in the company’s life cycle.

“Strong production guidance, a significant reduction in capital expenditure, operating assets which are now generating positive cashflow, and a stronger balance sheet with greatly reduced debt burden, provides Resolute shareholders the opportunity for a positive re-rate,” he said.

Under the SPP, eligible shareholders will be allowed to subscribe for up to A$30 000 worth of new shares.