Saracen Mineral to raise $61.2m

Saracen Mineral Holdings has announced a $61.2 million capital raising as the gold miner unveiled a first-half profit of $7 million.

The raising, comprising a $27.7 million placement and a $33.6 million rights issue priced at 31 cents a share, will help fund the acquisition of the Thunderbox and Bannockburn gold mines and operations from Norilsk Nickel for an initial $20 million sum.

The balance of funds will be used to ramp-up exploration and development activities at the company's existing operations, reduce debt and improve financial flexibility.

The gold miner also announced today a $7 million profit for the six months to the end of December, which contrasted with a $22.9 million loss in the previous corresponding period.

The result was achieved on a 15 per cent growth in production to 72,337 ounces delivering a 13 per cent boost in revenue to $110.6 million.

Net cash flow from operations was up 10 per cent to $33.8 million.

Saracen was partially insulated from plunging spot prices for gold by its hedge book.

The company held cash and cash equivalents of about $22.8 million at the end of the period, comprising cash on hand of $13.4 million and bullion of $9.4 million.

"With debt drawn of $22 million, net cash of $800,000 is well ahead of market guidance," the company said.

Managing director Raleigh Finlayson said Saracen's cash flow generation was strong during the period, which had placed the company in a robust financial position.

"This strong financial position and the support our hedge book provides, has allowed us to recently acquire the Thunderbox operations at a time when many companies, in the resources sector, are still under pressure to reduce costs and debt," he said.

"This is a quality asset and provides Saracen with the scope to generate profitable gold production over many years."

Shares in Saracen were in a trading halt, having last changed hands for 37.5 cents.