New funding will retire material debt and leave circa $4.3 million to $5.1 million in cash to pursue its strategy at the flagship Crater Mountain Project in Papua New Guinea.
The new "Crater Gold" company will have a recognised mining industry leader on the board and in management.
The project is highly prospective, and contains two separate existing epithermal gold Inferred Resources which combined exceed 800,000 ounces of gold.
This resource was formulated from just 14,500 cumulative linear metres of drilling that mainly took place in 2010-2013.
At the time the company became side-tracked the proposed development a small-scale mining operation and taking on a debt burden to do so.
A re-invigorated Crater Gold aims for a transformational increase in resources, which will be done by the purchase of two drill-rigs to be based at the project.
This will deliver over 10,000 cumulative linear metres per year.
The funding injection will include up to $16.2 million, comprising:
- A 11 for 2 renounceable pro–rata entitlement offer at $0.01 per share to raise at least $13.0 million and up to $15.0 million before costs; and
- The proposed conditional sale of 100% of non-core Croydon Project for $1.2 million in cash.
Why Papua New Guinea
Papua New Guinea is home to multi-million ounce major gold mines with operators such as Barrick, Newcrest and Harmony present.
The country's annual production exceeds 2.1 million ounces and has been growing.
PNG also offers a stable and competitive tax and regulatory regime – no material change in minerals law for 25 years - and the currency is ‘pegged’ to USD.
Adding further interest, incoming directors regard the owner of nearby Kainantu Project, K92 Mining (TSX-V:KNT) as a key relevant peer.
A new name and new board
The current proposed name change is to Paradise Gold Mining Ltd.
Sam Chan and Richard Johnson have agreed to resign from the company’s board and three new proposed directors have agreed to join on completion of the entitlement offer.
The three new proposed directors are:
- Alexander Molyneux, proposed chairman – 20-years’ experience in the minerals industry as an executive, director and specialist industry investment banker.
- Dorian L. (Dusty) Nicol, proposed non-executive director – Career geologist with over 40-years’ experience in discovery and resource development. Worked extensively in Papua New Guina for Esso Minerals and Rennison Gold Fields, including on Crater Mountain and Kainantu projects.
- Robert Usher, proposed non-executive director – Mining engineer with more than 25-years’ experience. Significant gold production experience including in PNG with Placer Dome at its Porgera operation from 1993 to 1999.