Stirling Resources has launched a $17.5 million rights issue to...

Stirling Resources has launched a $17.5 million rights issue to fund the recapitalisation of Monarch Gold.

The two-for-one offer at 15 cents a share will include one free attaching option for every two new shares at an exercise price of 15 cents.

The company said its major shareholders, Crawley Investments and DCM DECOMetal, which account for 39 per cent of the company, will take up their allocations.

The funds will pay for the recapitalisation of Monarch and ongoing working capital.

Shareholders have voted in favour of the recapitalisation as well as a name change to Swan Gold Mining.

Stirling will hold a 47 per cent stake in the company after the recapitalisation.

Stirling managing director Michael Kiernan said Swan would begin gold mining from its Carnegie project as soon as possible before a proposed relisting of the company in December.

Carnegie hosts 1.5 million ounces of gold at 2.3 grams per tonne with a 1.2 million tonne per annum processing plant.

The company's other major resource, Mt Ida, has a resource of 139,000 ounces at 13.8 grams per tonne including a reserve of 64,000 ounces at 17.4 grams per tonne with existing mine infrastructure.

Mr Kiernan said Swan would target 50,000 ounces a year from Mt Ida at a cost of $420 an ounce with production scheduled to begin in June next year.

Production at Carnegie would be 60,000 ounces a year at a cost of $800 an ounce with first production scheduled for November.

The former boss of Matilda Minerals Bruce Maluish is expected to head Swan

Stirling shares fell 3.5 cents, or 16.28 per cent, to 18 cents at 10am.

The offer will close on October 26.