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Ausgold (ASX:AUC) to raise $6.35M for Katanning Gold Project
  • Ausgold (AUC) has received binding commitments to undertake a placement to raise just under $6.35 million
  • More than 194 million shares will be issued to institutional and sophisticated investors at a price of 3.27 cents each
  • Ausgold received strong demand for the placement, as well as a $3 million cornerstone investment from Dundee Goodman Merchant Partners
  • The company will use the money to advance exploration at the Katanning Gold Project (KGP) in Western Australia and for general working capital
  • Ausgold's shares are up a healthy 17.1 per cent and are currently trading for 4.1 cents each

Ausgold (AUC) has received binding commitments to undertake a placement to raise just under $6.35 million.

The WA-based gold explorer entered a trading halt on Monday ahead of the placement but did not know how much it would be raising at the time.

194,150,000 new shares will be issued to institutional and sophisticated investors at a price of 3.27 cents each to raise $6,348,705.

This price represents a 10 per cent discount to the five-day volume-weighted average price.

Ausgold received strong demand for the placement from investors, as well as a $3 million cornerstone investment from Canadian resource investment group, Dundee Goodman Merchant Partners.

The company will use the money to advance exploration at the Katanning Gold Project (KGP) in Western Australia and for general working capital.

A diamond drilling program has also been planned for Katanning, with aims to add further high-grade resource ounces.

"The funds raised in this placement will be used to accelerate drill programs at the KGP, which are expected to add further high-grade resource ounces and to advance high priority targets within the company's significant tenement position," Managing Director Matthew Gumtree said.

"With this new funding, Ausgold will be expanding its current drill programs and we look forward to updating the market with further exploration success," he added.

Ausgold's shares are up a healthy 17.1 per cent and are trading for 4.1 cents each at 1:18 pm AEST.


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