Phoenix Gold (ASX:PXG) has received applications for $4,732,000 worth of shares priced at $0.13 each from the placement of shortfall shares arising from its entitlement offer that closed in April.
This will increase its cash in hand to about $14.7 million.
It had previously raised $4.3 million from the offer and $7.8 million through a placement, which allowed it to be fully funded for staged development of its Western Australia gold assets.
Phoenix had last week acquired for just $2 million, a heap leach plant in Western Australia from St Ives Gold Mining Company that provides an additional cash flow generation model for its Castle Hill project.
The well maintained 2.3 million tonne per annum facility will unlock the Ore Reserves of over 280,000 ounces of heap leach gold.
Castle Hill
The wholly-owned Castle Hill gold project, located in an infrastructure rich region near Kalgoorlie in Western Australia, has the potential to become a multi-million ounce gold mine.
Phoenix’s staged development strategy involves the use of spare milling capacity in the region to enable early net cash flow generation.
This also allows it to start production at a more modest capital cost while growing its mining inventory and delivering cash flow to grow the business over time.
Under this strategy, mining will commence in the September 2014 quarter and deliver 600,000 - 800,000 tonnes of ore annually for haulage and treatment at FMR Investments’ Greenfields processing plant in Coolgardie.
Initial production of 40,000 to 50,000 ounces of gold per annum is expected to start in the December quarter.
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