AuStar Gold Ltd. secured binding commitments to raise A$5.5 million to fund development and exploration at its Morning Star and Rose of Denmark gold mines in Victoria, Australia.
The placement to professional and sophisticated investors includes the issue of 1,222,222,222 shares at 0.45 Australian cents per share. Every 5 shares issued will have 1 attaching option exercisable for two years at 1.0 cent apiece.
The company also intends to offer a share purchase plan to raise A$1.0 million at the same price as the placement, it said Aug. 13.
AuStar will use the funds to conduct trial mining and production activity at the Rose of Denmark and Morning Star mines, conduct a regional exploration program across its about 667-square-kilometer tenement package, and for general corporate and working capital purposes.
The company poured first gold from Morning Star in late May and the first gold ingot at Rose of Denmark in early August.