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Kalgoorlie Mining Company well supported by the market with A$6m capital raising

Kalgoorlie Mining Company (ASX: KMC) has received a major vote of confidence from the market for the company's operations at the Bullant Gold mine - by receiving commitments for a A$6 million placement priced at $0.08.

The shares will also have an 1:1 attached option with an exercise price of $0.25 by May 2014. The capital raising will be completed in two tranches, with the second subject to shareholder approval.

The capital injection will be allocated to the construction of stage one of the gold treatment plant at Bullant, which provides several opportunities.

Not only will Kalgoorlie Mining be able to mill its own ore by around mid-2012 when construction of the facility is forecast to be completed, but can also process nearby third party ore - and has already entered an agreement with Phoenix Gold (ASX: PXG) to mill Phoenix's ore in the future.

Kalgoorlie Mining already has its own ore agreement with Barrick Mines' (NYSE: ABX) Australian subsidiary, with the company receiving $5.7 million to date.


Construction approval pending

Kalgoorlie Mining said that the company is anticipating approval shortly from the Department of Mines and Petroleum for construction to be able to commence at site. Environmental approval has already been received.

The company is aiming to have the crushing circuit completed within the March quarter of 2012, which will have a capacity of 220 tonnes per hour enabling it to comfortably feed the planned plus 700,000 tonnes per annum gold treatment plant.