Proactive Investor's  Instablog

Kentor Gold (ASX: KGL) has received a major vote of support from institutional investors to raise up to A$26 million in challenging capital markets.

The funds will expand the Murchison gold operations which will conduct the first gold pour within weeks, and the Jervois Copper and Base Metals Project where Kentor has just made some stunning intersections.

The capital raising will provide up to $26 million in funds, comprising a successful placement already completed to institutional investors at $0.62 for gross proceeds of $6.2 million. The price is a 17.7% discount to the 5 day VWAP.

A 5 for 17 non-renounceable rights issue has also been launched to raise up to another $20.5 million. The placement shares are also eligible to participate in the Rights Issue.

A substantial shareholder and long time investor in Kentor, KMP Investments Pte Ltd, have placed their support in the company which has agreed to subscribe for New Shares which are not taken up by Eligible Shareholders as part of the Rights Issue.

Highlighting the financial strength of KMP Investments, it is subsidiary of the Salim Group which is Indonesia's largest conglomerate, with investments spread across South-East Asia, Hong Kong, North America and Australia.

In addition to taking up its entitlement of $4.1 million, KMP Investments has agreed to subscribe for up to 8.3 million New Shares at $0.60 - amounting to around $5 million from any Rights Issue Shortfall.

Simon Milroy, managing director of Kentor, commented: "We are pleased to have achieved this capital raising in difficult market conditions. We are also buoyed by the continued strong support from the Company's major shareholder, KMP.

"The proceeds from the capital raising will allow Kentor to expand the Murchison gold operations, which is expected to significantly reduce operating costs thus delivering strong cashflows to Kentor."

Stunning intersections at Jervois

While Kentor was organising the capital raising, the company announced what are simply some stunning intersections from the Jervois Project's Bellbird Deposit, located in the Northern Territory.

Highlights include:

- 10 metres at 4.64% copper, 23.5g/t silver and 0.10g/t gold from 67 metres;
- 15.5 metres at 1.55% copper, 19.9g/t silver and 0.26g/t gold from 129 metres; and
- 18.9 metres at 2.44% copper, 16.3g/t silver and 0.15g/t gold from 84.7 metres.

The results extend the Bellbird strike to around 900 metres.

The drilling continues to indicate significant mineralisation at Bellbird which is emerging as an increasingly important deposit within the Jervois Project, and is located just 6 kilometres along strike from the known larger Marshall and Reward deposits.

A recently completed Scoping Study found that Jervois would be a robust project producing strong financial returns. This study examined annual processing rates of 1.5 million tonnes per annum (Mtpa), 2 Mtpa and 2.5 Mtpa.

The current resource at Jervois is an Inferred 11.9 million tonnes at 1.3% copper and 25.2g/t silver for 150,500 tonnes of contained copper and 9.7 million ounces of contained silver.

Murchison Gold Project readies for first pour

At the Murchison Gold Project in Western Australia, Burnakura is forecast to commence gold production within weeks at an initial production rate of 24,000 ounces annually, with the added potential to expand production via Gabanintha.

Planning is underway for an expansion in 2013, with initial production to be sourced from the Lewis and Reward pits at Burnakura.

Proactive Investors is a market leader in the investment news space, providing ASX "Small and Mid-cap" company news, research reports, StockTube videos and One2One Investor Forums.