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Gold Road taps market for $40m

Drilling at Gold Road Resources' projects on the Yamarna belt.

Gold Road Resources has taken advantage of the recent lift in its share price to tap the market in a $40 million capital raising.

Gold Road had $18.9 million at March 31 but its shares ran strongly at the end last month, lifting from 36¢ on May 12 to a 12-month high of 48¢ on Monday.

Gold Road’s surge was kicked off by Independence Group’s move to pick up a 3.7 per cent stake in the miner in mid-May, paying 38.5¢ a share when Minco Investments sold down its holding.

Independence Group, which is now understood to hold just under 5 per cent of Gold Road shares, has said it does not intend further buying until it sees the results of the company’s feasibility studies on its flagship Gruyere deposit towards the end of the year.

The buy-up still led to speculation Gold Road is a potential takeover target, and its share price was helped along by a string of recent announcements, including a significant resource upgrade at Gruyere last week.

Argonaut and Macquarie Capital launched the raising late yesterday. It is understood the shares are being offered at about 44¢, a minimal discount to Gold Road’s last trading price of 45.5¢.

The raising will be used to complete Gold Road’s Gruyere feasibility study and for regional exploration.

It is unclear whether Independence Group will take part in the raising.