Galantas Gold Corporation (LON:GAL) increased the ceiling on its proposed private placing to C$8mln from C$6mln, due to strong investor demand.
Earlier this week the company said it would raise at least C$5.1mln to bring its gold mine up to commercial production volumes and the extra funds will allow the acceleration of exploration plans designed to expand resources.
In the placing it is now selling 26mln units comprising one common share in the company plus one warrant. The units are priced at 30 Canadian cents each and each of the warrants are exercisable at 40 Canadian cents over a 24-month period.
On Tuesday, the company noted that its largest shareholder Melquart Ltd is expected to subscribe for 2mln units for gross proceeds of C$600,000, and chief executive Roland Phelps is expected to subscribe for units worth the equivalent of GBP250,000 or about C$435,000, it said.
On closing, Phelps will retire as CEO and as a member of the board and be replaced by Mario Stifano, an experienced mining executive who raised over $700 million in capital for mining companies such as Lake Shore Gold Corp, Cordoba Minerals Corp and Dore Copper Mine Corp. Stifano will be nominated as an Ocean Partners UK Ltd representative on the board following regulatory approval.
Commodities trader Ocean Partners will subscribe for a minimum of 1.67mln units.
An existing offtake agreement with Ocean Partners is expected to be extended from a minimum total of 50,000 tonnes of concentrate deliveries to a minimum total of 150,000 tonnes and marketed at market rates, Galantas said.
“The current operation, brought to full production, provides an exciting opportunity in a highly prospective gold district,” Stifano said on Tuesday.
“In line with the new capital and plans to move to full production, following the closing date, I plan to introduce a bolstered and experienced operating team.”
The company will also follow up on the significant exploration potential of numerous veins including the Joshua vein that intersected 21.6 meters of 9.9 grams per tonne gold on the major structure that hosts the world-class Dalradian Gold project, as well as New Found Gold’s recent Queensway discovery.
“With the support of Ocean Partners as a critical long-term offtaker and partner, we believe we can unlock significant value for all stakeholders and shareholders,” Stifano added.
On the closing date of the private placement, the maturity date of an Ocean Partners loan due on December 31, 2021 will be extended to December 31, 2023 and the maturity date of a G&F Phelps Ltd loan due on June 30, 2021 will be extended to December 31, 2023. G&F Phelps is a company controlled by current CEO Phelps.