Besra Gold (ASX:BEZ, TSE:BEZ) is raising up to US$14.25 million through a placement of shares to Victory Corporation Group of Switzerland (VCG) that includes a gold sale agreement.
The investment in Besra clearly demonstrates VCG's belief in the long term demand for gold and recognition of Besra's potential and upside in the Bau gold project.
Net proceeds from the placement of 250 million shares priced at US$0.057 each will be used to pay outstanding interest under its convertible and gold-linked notes and restore production at its two Vietnamese mines to normalised levels.
If the financing closes, VCG will hold a 40% stake in the company, making it the largest shareholder with the right to appoint two members to Besra’s board.
The agreement includes the sale at spot prices of up to 50,000 ounces of gold through one of VCG’s related companies.
Besra had earlier this month re-opened its Bong Mieu mine in central Vietnam.
Bong Mieu and Phuoc Son had produced about 60,000 ounces of gold in 2013 before severe weather in November caused major disruption at Phuoc Son and complete suspension of operations at Bong Mieu.
