Teranga Gold Corporation has plans to offer 62 million shares of the company at a price of $1.05 per common share.
Aggregate gross proceeds are expected to raise $65m, which would be used to develop the recently acquired Banfora gold project in Burkina Faso.
According to signed agreement, 32.5 million common shares will be issued on a bought deal basis carrying a price of $1.05 per common share. A syndicate of underwriters co-led by RBC Capital Markets and Cormark Securities will issue them for gross proceeds of approximately $34m.
Remaining 29.5 million common shares will be issued on a non-brokered private placement basis at the same price to Tablo Corporation for gross proceeds of approximately $31m.
After completion of this equity offering Tablo Corporation, administered by David Mimran, will hold a total of 92,876,260 common shares, or 17.4%, of Teranga's issued and outstanding common shares.
Teranga Gold Corporation has entered agreements to offer a total of 62 million common shares of the company at a price of $1.05 per common share for aggregate gross proceeds of approximately $65m.
Under the agreements, 32.5 million common shares will be issued on a bought deal basis at a price of $1.05 per share through a syndicate of underwriters co-led by RBC Capital Markets and Cormark Securities for gross proceeds of around $34m (public offering).
An additional 29.5 million will be issued on a non-brokered private placement basis at the same price of $1.05 per common share to Tablo Corporation for gross proceeds of approximately $31m.
Following completion of the public offering, Tablo Corporation, controlled by David Mimran, will hold a total of 92.8 million common shares, or 17.4%, of Teranga's issued and outstanding common shares.
Stanhope Capital served as financial advisor to Tablo Corporation and David Mimran on this Concurrent Private Placement.
Regarding the public offering, underwriters will have the option to purchase up to an additional 4.88 million common shares at the offering price to cover over-allotments. This option can be exercised in whole or in part at any time up to 30 days after closure of the offering.
If the over-allotment option is exercised in its entirety, the aggregate gross proceeds of the offering to the firm will be approximately $70m.
The firm also plans to direct approximately $30m of net proceeds of the offering to construction readiness activities for its newly acquired Banfora gold project in Burkina Faso, West Africa.
The kinds of activities may include reserve development drilling, updating scientific and technical report and optimisation studies, commencement of village relocation and early engineering works.
Teranga Gold intends to use the remainder of net proceeds to fund exploration activities associated with its Banfora, Golden Hill and Gourma gold projects in Burkina Faso and for general corporate purposes.
The offering is scheduled to close around 21 November, and is subject to certain conditions such as receipt of all necessary approvals, including approval of the Toronto Stock Exchange and the Australian Securities Exchange.