Theta Gold Mines Ltd (ASX:TGM) (OTCMKTS:TGMGF) has been given a strong endorsement of its South African gold strategy by an oversubscribed share placement which has raised $4 million.
The placement was well over-subscribed from local and international family offices and institutional investors.
Funds raised will be deployed to accelerate the Theta Open Pit Starter Project in South Africa towards development, undertake general exploration and drilling for reserve conversion as well as for general working capital requirements.
“Financial flexibility”[hhmc]
Theta Gold Chairman Bill Guy said: “We are very pleased to welcome new investors to our register.
"The new funds provide us with the necessary financial flexibility to continue pre-development activities on the Theta Project.
"We have a very active works program underway and we will provide shareholders with a steady stream of updates as we hit key milestones on the way to construction commencing.”
The company will issue 16,667,084 fully paid ordinary shares at $0.24 per share, which is a 10.6% discount to the 20-day VWAP, to raise $4,000,100 before costs.
The placement is expected to be settled on Thursday, July 23, 2020, with the placement shares to be issued on Monday, July 27, 2020.
The placement will be made under the companys placement capacity pursuant to Listing Rule 7.1.
Sanlam lead manager[hhmc]
Sanlam Private Wealth acted as placement lead manager and the company is grateful for their support with Sanlam, along with Old Mutual and Investec, being one of South Africa's largest asset managers managing in excess of US$50 billion.
“Promising gold play”[hhmc]
The raising success comes as no surprise to Far East Capital Limited analyst Warwick Grigor, who recently wrote in a weekly commentary titled Theta Gold Mines is another promising South African gold play:
“It is an undisputed fact that investors have had an aversion to South African gold mining projects in recent years, but this is not really logical given the amount of money that companies have spent in other, higher risk African countries.
"South Africa has the best infrastructure in Africa and its geological credibility is unparalleled.
"What we need to see is companies like Theta and West Wits developing their ore bodies and generating cash flow and profits that correspond with their spreadsheets.
"Success from these companies could lead to a revival of the gold sector in South Africa and a re-rating of all companies involved," Grigor stated.
“Very compelling project”[hhmc]
Theta Golds core project is next to the historical gold mining town of Pilgrims Rest, in Mpumalanga Province, 370 kilometres northeast of Johannesburg by road.
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