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- Tesoro Resources (TSO) plans $7.3 million capital raise to advance work at its El Zorro gold project in Chile
- Firm commitments have been received from investors for a placement of 51 million shares to be issued at 8.5 cents to raise $4.3 million
- Following the placement, Tesoro plans to undertake a share purchase plan (SPP) to raise a further $3 million
- The funds raised will increase the company’s cash reserves to $14.8 million, with 90 per cent planned towards the El Zorro project
- Shares in Tesoro Resources were down 9.52 per cent to 9.5 cents at 12:44 pm AEDT
Tesoro Resources (TSO) is looking to raise $7.3 million to advance work at its El Zorro gold project in Chile.
The company has received firm commitments from investors for a placement of 51 million shares to be issued at 8.5 cents each, raising $4.3 million.
Upon completion of the placement, Tesoro plans to undertake a share purchase plan (SPP) to raise a further $3 million.
As a result, Tesoro’s cash reserves are set to increase to $14.8 million, with 90 per cent of the proceeds set aside the El Zorro project.
In particular, the company is focused on resource expansion drilling, drilling at the El Zorro District, and a scoping study for the project.
The plan to accelerate drilling follows an announcement last week that more high-grade discoveries had been defined at the Ternera Gold Deposit, which is located within the project.
Specifically, assays from diamond drilling at the deposit returned grades of 1.4 metres at 55.67 grams of gold per tonne (g/t) within 25 metres at 4.22g/t gold.
Drilling is ongoing at this deposit, as well as the Drone Hill and Toro Blanco deposits, and Managing Director Zeff Reeves said the company will be “well positioned” to continue exploration once the financings have been completed.
The issue price of the shares offered under the placement represents a 19 per cent discount to the company’s last closing price, and is a 14.4 per cent discount to the 15-trading day volume weighted average price.
Under the SPP, eligible shareholders will be able to apply for up to $30,000 worth of new shares at the same issue price as the placement.
While the board intends to cap the SPP at $3 million, it reserves the right to accept over-subscriptions or to scale back applications, and also has the ability to change the closing date or cancel the plan all together.
Settlement of the placement is scheduled for October 29, with allotment of the shares set for November 1, after which the SPP will open on November 8.
Shares in Tesoro Resources were down 9.52 per cent to 9.5 cents at 12:44 pm AEDT.
