Silver Lake flags $64m capital raising

Gold miner Silver Lake Resources has moved to insulate its cash position following the gold market free fall, yesterday announcing plans for a $63.7 million capital raising.

Silver Lake, which was one of the hardest hit following the April gold crash, announced yesterday it had already wrapped up $47.5 million through an underwritten placement to "sophisticated and professional investors" at 85� a share to repay debt and provide working capital.

The company said it hoped to raise a further $15 million through a share purchase plan, and another $1.2 million through a placement to directors. Both raisings are priced at 85� a share.

Silver Lake shares dropped 6� to 95� yesterday.

Silver Lake was trading as high as $2.12 a share in early April before the gold price plunged, dragging its share price to 55¢ a share in the last week of June.

This month the gold miner, which has operations in the Murchison and south of Kalgoorlie, said it expected to slash $320 million to $370 million - as much as 44.5 per cent - from its book value. Before the raising it had $19.2 million in cash and bullion and $32 million in debt.

Before the dilution effect of the raising, its directors held 7 per cent of the company while other major shareholders included US investment firm Van Eck (6.4 per cent) and capital managers Baker Steel (5.2 per cent).

The raising is underwritten by RBC Capital Markets.

Managing director Les Davis said the raising highlighted the "strong support" Silver Lake had from existing and new investors in regards to the future prospects of the company.