OGI Group (ASX:OGI), which recently acquired alluvial diamond and graphite projects in Mozambique has raised $6 million through the issue of equity loans which will convert to shares following shareholder approval at its upcoming Extraordinary General Meeting.
The loans have a coupon rate of 10% and will convert to an effective price of $0.20 per share following a 1 for 67 consolidation of share capital.
As a result of the strong support received for the issue, the company will now proceed with a prospectus to raise a further $3.5 million.
OGI is presently finalising underwriting agreements and will continue its current suspension until these contracts have been finalised.
Under the terms of the prospectus, existing shareholders will be given a priority right to increase their holdings for a minimum of $2,000 at $0.20 per share.
OGI will deploy some of the first tranche of funds to immediately commence an intensive exploration program at its Save River alluvial diamonds project to delineate and develop the prospects.
This project, comprising two concessions covering 22,000 hectares is located downstream from the prolific Marange fields in Zimbabwe.
OGI holds interests of 51% and 52% in these tenements respectively.
OGI also acquired six graphite tenements in the Balama graphite province, Cabo Delgado.
These prospects are located in close proximity to major graphite discoveries recently made by Syrah Resources (ASX:SYR) and Triton Resources (ASX:TON).
Exploration work conducted in September and October proved high grade graphite mineralization through outcrops and shallow drilling.
OGI intends to recommence exploration work with an airborne electromagnetic survey over all its graphite licenses in January 2015 followed by a resource drilling program and scoping study up to the end of 2015.
The anticipated cash flow from its diamond project together with its strong cash balance following current capital raisings provides the company with the financial flexibility to accelerate its graphite exploration and eventual mining.
