Mutiny Gold (ASX:MYG) has received strong support from investors for its underwritten 1 for 10 entitlement issue to raise $1.65 million for the drilling program at its Deflector Gold-Copper Project in Western Australia's South Murchison region.
The company received valid acceptances for 32,633,614 new shares priced at $0.027 each, or about 53% of the total shares offered.
Underwriter Argonaut Capital or its nominees will subscribe for 28,568,897 shortfall shares to complete the offer.
Proceeds will be applied to the recently commenced drilling program at the Deflector Project.
"On behalf of the Directors I would like to thank shareholders for the strong support of the issue and their continuing support of the company and we look forward to the success of the current drill program."
The entitlement offer is part of a broader $4.15 million capital raising that included a $2.5 million placement - $1.5 million to leading contractor Ausdrill Limited (ASX: ASL), which was appointed its preferred contractor for current mining services in Australia.
Mutiny has 7,500 metres of drilling planned in 2014, including 5,500 metres of reverse circulation and 2,000 metres of diamond drilling.
An initial 4,500 metres of reverse-circulation drilling will target shallow untested extensions of the Central and Contact lodes.
This is fully permitted and focused on near mine extensions highlighted by the Sub-Audio Magnetics (NYSE:SAM) surveys undertaken last year.
In the December 2013 quarter, Mutiny completed an updated DFS for its Deflector Gold project that demonstrated that it is a high grade, low cost mine that could provide considerably high profit margin. It also started a new Structured Finance initiative for the project.
The DFS is based on an initial production forecast of 498,000 gold equivalent ounces with average annual production of 80,000 gold equivalent ounces and targeted production of 150,000 gold equivalent ounces.
Deflector has an Ore Reserve of 2,344,000 tonnes at 4.9g/t gold, 0.8% copper and 5.9g/t silver for contained Reserves of 367,000 ounces of gold, 19,000 tonnes of copper and 441,000 ounces of silver.
The completion of the $1.65 million entitlement offer will bring that total funds raised by Mutiny Gold's capital raising initiative to $4.15 million, fully funding its 2014 drilling program that aims to expand its current high grade gold resource at Deflector.
That shareholders subscribed for 53% of the shares on offer under the underwritten issue demonstrates the confidence in the company's projects and plans.
Deflector already hosts an Ore Reserve of 415,000 gold equivalent ounces with attractive all in sustaining costs at $801 per ounce gold and capital costs of just $62 million, figures rarely seen in "new" gold projects globally.
Drilling is likely to improve both resources and reserves, which would in turn improve the economics of the project.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.