Resources & Energy Group Ltd. said Nov. 9 that it agreed to acquire the East Menzies gold project in Western Australia for A$2.1 million in cash and shares.
The property comprises 27 tenements and 19 applications spanning over 103 square kilometers. The company will grant the vendors a 1% net smelter return under the deal, which is expected to close Dec. 21.
Resources & Energy also plans to raise up to A$5 million from a two-tranche placement of shares at 5 cents apiece. The first tranche will comprise 20 million shares for A$1 million, while the second tranche covering up to 80 million shares for A$4 million will be subject to shareholder approval to be sought at a Nov. 28 meeting.
Proceeds from the offering will be used to fund exploration and development work at the company's Mount Mackenzie and Radio properties, as well as for general working capital.
Resources & Energy, meanwhile, said its major debt holders agreed to convert between A$4.5 million and A$5.5 million of debt at the placement price to 90 million to 110 million shares, respectively.
Additionally, the company said it appointed COO Christian Price as acting CEO. Price replaces Richard Poole, who will remain on Resources & Energy's board as the operations director.
