June 5, 2020 / 12:05 PM / a month ago

SolGold raises £27 mln to fund exploration of copper, gold in Ecuador

LONDON, June 5 (Reuters) - SolGold raised 27.1 million pounds ($34.3 million) in a discounted share placement on Friday, exceeding its initial target, to fund the exploration of copper and gold in Ecuador.

The London-listed miner said late on Thursday it targeted at least 16 million pounds and ended up placing a total of 121 million new ordinary shares at a price of 21.5 pence per share.

This represented a discount of about 10% to SolGold’s share price close of 24 pence on Thursday.

Chief Executive Nick Mather said in addition to $150 million Franco-Nevada financing, the fresh capital would see SolGold fully funded through the delivery of the definitive feasibility study on Alpala and allow for more exploration.

SolGold signed the deal with the streaming company in May to develop its Alpala project in Ecuador.

That study of the Alpala project is expected to be completed in 2021 with production of copper and gold slated for 2025.

“They want to chase the exploration upside and I suspect that will make some people happy because it had basically ground to a halt with coronavirus,” said Ben Davis, an analyst at Liberum.

BHP , the world’s largest miner and 15% shareholder in SolGold, did not participate in the fundraising owing to a standstill agreement which runs until October.

Newcrest, which also has a 15% stake in SolGold, was not immediately available for comment.

Up to $5 million could also be placed with a potential investor with whom talks are underway, SolGold said.

Shares in of SolGold were down 10.4% to 21.48 pence by 1143 GMT, underperforming the wider market which was up 1%.

$1 = 0.7912 pounds Reporting by Zandi Shabalala Editing by Chizu Nomiyama

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