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Empire Resources Ltd Pockets Cash Ahead Of Transition To Gold Producer

Empire Resources Ltd (ASX:ERL) has raised $1.26 million through a placement of 63 million shares at $0.02 per share, with the company receiving overwhelming demand from sophisticated investors.

David Sargeant, managing director, commented:

"Empire is at an exciting stage as it evolves from a gold explorer to a gold producer with this funding to be used for the company's 60% interest in the development of the Penny's Find gold deposit into an operating mine.

"We are well placed with funds to progress to gold production."

Funds will be applied to: Moving the road to enable the open cut to proceed; Grade Control drilling; Converting underground resources to reserves; and General working capital.

Empire has completed a bankable feasibility study (NYSE:BFS) on the 60% owned Penny's Find project, which is located 50 kilometres northeast of Kalgoorlie in Western Australia.

The BFS proposes conventional mining of a single open pit to a depth of 80 metres using excavators and dump trucks with ore transported to a nearby toll milling facility.

Empire plan to commence open pit mining during the September quarter with first gold production in the second half of 2016.

BFS open pit details

The study estimates $1.5 million capex for $7.6 million free cash flow over the open pit mine life of 11 months.

Free cash flow increases to $11.6 million if the price of gold used is increased to A$1700 per ounce from A$1500 per ounce.

Highlighting further upside, Australian Dollar gold is currently trading at circa A$1800 an ounce.

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