Source: PROACTIVE INVESTORS
Vatukoula Gold Mines expects the second tranche of a placing to raise £4.5 million (FJ$13.1 million) will be completed by this Friday.
Updating on its subscription agreement with Chinese oilfield services firm DRK, which is taking a 19.2 per cent stake, gold miner Vatukoula also unveiled a series of director changes.
On May 20, it was announced SCD Energy, a DRK subsidiary, had subscribed for 30 million shares at0 £0.15 (FJ$0.43), more than twice the prevailing Vatukoula share price at the time of the announcement.
The first tranche of 15 million shares, which raised £2.25 million (FJ$6.55 million), was completed three days later; the second is now expected to be completed by June 28.
Appointments to comply
As agreed under the deal, SCD has now appointed two directors to the board. They are Wei Li and Yongan Lu.
Under the agreement, the board requires seven directors.
To that end, finance director Kiran Caldas Morzaria and non -exec director John Francis Kearney have agreed to tender their resignations as directors immediately.
Although no longer a director, Morzaria will remain as the finance chief at the firm, however, and continue to play a critical role in the development of VGM.
Debt financing
DRK has also agreed to work together with Vatukoula on the debt financing to fund the planned expansion programme of the gold mine.
If Vatukoula Gold Mine enters into a US$40 million (FJ$75.6 million) debt financing package or more, facilitated or introduced by DRK by September 17 this year, the Chinese group will have the option to acquire another 24 million shares at £0.15 (FJ$0.43).
If exercised, DRK would then hold around 29.9 per cent of the enlarged issued share capital.
The funds raised from the subscription will be used for working capital purposes while VGM works to secure the debt financing.
DRK is a comprehensive oilfield service group engaged in engineering construction, technology service, chemical engineering and oilfield development.
VGM said DRK came to see the mine in January.
DRK’s presence on the share register, along with that of Zhongrun, will give it access to Chinese capital for the US$40 million needed to proceed with the planned mine development at Vatukoula.
This development will see it open up deeper higher grade areas at the mine.