Emerging Gold Producer Focus Minerals Limited (ASX:FML) Raises A$8.25 Million To Fund Three Mile Hill Plant
Perth, Oct 12, 2009 AEST (ABN Newswire) - Focus Minerals Limited (ASX:FML) is pleased to announce that it has raised $A8.25m via a share placement in institutional investors to expedite funding for big ticket spare parts for the Three Mile Hill mill and for increased exploration and reserve definition drilling.
Approximately half of the proceeds - which will be raised through the placement of 206.4 million shares at 4 cents each to institutional clients of Sydney based Petra Capital - will be used to acquire crucial spare parts for Focus' refurbished Three Mile Hill mill.
When the decision to refurbish the Three Mile Hill treatment facility was taken, the Company had also decided that significant insurance spares with long lead times would be purchased out of cash flow next year.
Recent breakdowns at the Greenfields treatment facility had caused the Company to rethink this strategy and while the suspension of milling has had little or no effect on Focus' production, it has served as a timely reminder that from time to time things do breakdown and being prepared for this is very important.
Focus Chairman, Mr Don Taig, said the raising underpinned the Company's strong financial position, but also recognised the critical nature of ensuring future milling operations could continue without major incident once the refurbished plant was commissioned.
"About half of the funds raised will be directed to the purchase of spare parts, particularly those that would take some time to arrive from overseas and will essentially amount to an insurance policy for the Company," said Mr Taig.
"The purchase of these 'big ticket' spare parts will allow Focus to significantly mitigate the risk of having to suspend operations at Three Mile Hill in the event of a breakdown," he added.
"In addition, the Company has some very exciting drill targets and believes that now is the time to really ramp up the drilling programme in order to convert as much of the Company's resources into commercial reserves," Mr Taig said. "The other half of the raising funds, less costs, will be directed towards this activity."
Focus continues to make solid progress on the refurbishment of its 1.2 million-tonne-ayear Three Mile Hill plant, which is scheduled for completion at the end of November. The Company is forecasting production to increase to 80,000 ounces in 2010, compared with some 41,000 ounces last financial year. It is forecast to rise to more than 100,000 ounces by 2011.
About Focus Minerals Ltd
With over 3.8Moz of Mineral Resource, Focus Minerals Limited (ASX:FML) has a highly strategic portfolio of assets across Australia's two leading gold producing districts – the Kalgoorlie/Coolgardie belt and Laverton – and the financial muscle to continue to unlock further potential for growth.
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