A strategic North American investor Crescat Capital LLC has corner-stoned Southern Gold’s (ASX: SAU) oversubscribed $10.2 million equity raising.
Southern Gold has received binding commitments from sophisticated and institutional investors for the subscription of 85 million shares $0.12 per share to raise the $10.2 million.
The placement was “well oversubscribed” and includes Denver-based asset management firm Crescat joining the company’s register with its $2.5 million cornerstone investment.
This is expected to give Crescat a 9.8% interest in Southern Gold after the equity raising has been completed.
Metal Tiger PLC and Flannery Family Office also subscribed for $1.7 million and $1 million, respectively, to maintain their 17.1% and 10.4% shareholdings.
The placement will be completed in two tranches with $3.8 million to be raised in the first and $6.4 million in the second.
Southern Gold managing director Simon Mitchell said the company has now attracted a “significant portfolio” of technically astute equity holders that understand the company’s potential in South Korea.
“This funding allows the company to concentrate on finding the next major discovery and to build significant value for our shareholders over the next two years and beyond,” Southern Gold managing director Simon Mitchell said.
“I especially welcome North American institution Crescat, which is advised by Dr Quinton Hennigh, and given Dr Hennigh’s background in a similar exploration group in Japan, Irving Resources, I believe this is an excellent endorsement of our strategy in South Korea.”
Dr Hennigh advises Crescat Capital
Crescat currently has more than $130 million under management and includes a precious metals fund.
Renowned economic geologist Dr Hennigh is a technical advisor to the firm.
Dr Hennigh has more than 25 years’ experience with major gold mining companies including Newcrest Mining, Newmont Mining and Homestake Mining.
He current leadership roles comprise chief executive officer of TSX-listed Novo Resources, and director of several companies including Irving Resources, TriStar Gold, Precipitate Gold Corp and NV Gold Corp.
South Korean gold projects
Southern Gold is the only foreign gold explorer actively working in South Korea.
The company owns six gold-silver assets in the country’s south-west including: Aphae, Deokon, Beopseongpo, Weolyu, Dokcheon and Jangwhal.
Maiden drilling at Alphae recently returned 0.21m at 107.5 grams per tonne gold and 166g/t silver and 0.86m at 5.49g/t gold and 59/t silver.
Southern Gold has secured a drilling partnership with Ausino Drilling Services last month, which is expected to support exploration across the company’s projects.