Pacific Niugini (ASX:PNR) has raised $3.3 million through an issue of convertible notes to sophisticated investors to underpin the final development requirements of the Nicolsons gold mine near Halls Creek, Wesern Australia.
This is up from the $3 million it originally sought due to strong over-subscriptions.
The 3,300 convertible notes have a face value of $1,000 each with a coupon of 8% per annum payable six monthly in cash or shares at the election of the note holder.
Notes can be converted to ordinary shares at $0.06 per share.
In addition, one option will be issued per share converted in the first year and one option will be issued per two shares converted after the first year.
The notes mature on the 31st of December 2017 unless the existing Commonwealth Bank (ASX:CBA) facilities have not been discharged. If CBA facilities are not fully discharged, maturity will be two months after the discharge of the CBA facilities.
A further $4.9 million will be raised through a 1 for 4 rights issue priced at $0.05 with one attaching 2 year option for every two new shares subscribed.
Peter Cook, chairman, commented:
"The issue of these convertible notes will allow the company to complete the development of the Nicolsons mine where profitable operations are expected in calendar year 2015.
"The notes are unsecured and convert at 6 cents per share, which is 20% higher than the purchase price for existing shareholders under the proposed entitlements issue which we intend to lodge with the ASX shortly."
Development of the Nicolsons mine and associated infrastructure is continuing as planned.
Underground development has now intersected the ore zone on the first level with assay results pending, however quartz veins visually consistent with the known mineralisation at Nicolsons have been noted.
The underground decline is now progressing in good ground, and the issues with partially oxidized material encountered higher up in the decline appear to have passed.
The processing plant refurbishment is well advanced, with commissioning planned for late July and first ore production expected during August 2015. All other required infrastructure is in place.
Pacific Niugini previously advised that full production should be achieved in October/November 2015.
The company is developing the project through its wholly owned subsidiary, Halls Creek Mining Pty Ltd, and is the 80% equitable owner of the project. Bulletin Resources (ASX:BNR) (20%) and is contributing to project costs in accordance with its equitable interest.
The site has an existing 150,000 tpa processing plant and open pit mine which is being used as the underground access point.
Nicolsons Mine provides an immediate four year production plan with high grades and planned annual production of 25,000 to 30,000 ounces.
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