Rights issue to refloat Monarch

Stirling Resources yesterday launched a rights issue to raise around $17.5 million to refloat Monarch Gold.

Stirling Resources yesterday launched a rights issue to raise around $17.5 million to refloat Monarch Gold.

The offer was made as an entitlement issue of two new shares for every share held, with an issue price of 15 cents per share.

It also includes one free attaching option for every two shares issued, with a strike price of 15 cents.

The company is despatching a prospectus to shareholders and expects the offer to close on 26 October.

Stirling’s major shareholders Crawley Investments and DCM DECOMetal, which together account for 39% of the company’s equity, have proposed to take up their allocations under the entitlement.

When fully subscribed, Stirling will have around 177 million shares on issue.

The funds will primarily be used to recapitalise Monarch and fund the company’s ongoing working capital requirements.

Monarch shareholders last week approved Stirling’s recapitalisation proposal and a name change to Swan Gold Mining.

Stirling will hold and control 47% of Swan Gold upon completion of the refloat.

The company hopes to commence its gold operations near Kalgoorlie as soon as possible, with a view to re-listing on the Australian Securities Exchange in December this year.

Swan Gold’s portfolio includes the Mt Ida high-grade underground gold mine and the Carnegie project, which has a 1.2 million tonne per annum processing facility.

The projects are expected to produce 50,000 and 60,000 ounces of gold per annum respectively, following a June 2010 production start-up date.

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