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Drilling at Gryphon s Banfora gold project in Burkina Faso.
Drilling at Gryphon's Banfora gold project in Burkina Faso.

UPDATE 1.30pm: Gryphon Minerals has raised $31.3 million in a placement to ramp-up development of its Banfora gold project in Burkina Faso.

The company will issue of 52.2 million new shares priced at 60 cents each to new and existing institutional and sophisticated investors through Euroz.

Gryphon said the proceeds would be used primarily to advance the initial development of the Banfora gold project through the ordering of long lead items including an initial SAG mill payment.

"The proceeds will also be applied to preliminary site and earth works as well as to continue resource and reserve definition drilling," the company said in a statement.

Some funds would also be used to continue pre-feasibility studies on the company's gold projects in Mauritania.

Gryphon is working on a definitive feasibility study for Banfora based on a 3.5mtpa operation.

The company is envisaging a staged 2mtpa start-up operation that could be up scaled to 4mtpa.

It said a final decision on the preferred case would be made in the coming months.

Gryphon said the raising would boost its cash position to $62 million with an additional $35 million in listed investments.

Shares in the company closed down 5.5 cents, or 8.09 per cent, at 62.5 cents.