Placing to Raise £2.6m

RNS Number : 2760P

Georgian Mining Corporation

16 November 2016

 

16 November 2016

Georgian Mining Corporation ('GMC' or 'the Company')

Successfully Raises £2.6 million to Deliver Resource and Development at Kvemo Bolnisi

Georgian Mining Corporation is pleased to announce that it has raised £2.6 million by way of an oversubscribed placing of 32,500,000 new ordinary shares of no par value in the capital of the Company ('the Placing Shares'), with new and existing shareholders in the Company, at a price of 8 pence per Placing Share ('the Placing').

The net proceeds of the Placing  will be used to facilitate the Company's strategy to deliver an initial resource of between 3 and 5 million tonnes of open pit copper-gold sulphide mineralisation at the Kvemo Bolnisi Copper-Gold Project in Georgia ('KB' or 'the Project') together with gold oxide mineralisation that has been reported previously.  This will enable GMC to utilise the 1 million tonnes per annum excess capacity which is available at its partner's flotation plant ('the Plant') at the producing Madneuli Mine, located just 7km from the project to process copper-gold sulphide mineralisation as well as the use of one of its partner's two gold heap leach plants to process gold oxide mineralisation.  The proceeds will also fund a Scoping Study, an optimisation review of the Plant, metallurgical test work and internal pre-feasibility studies.  The Company's strategy is to deliver production and cash flow utilising existing infrastructure to minimise capex requirements. 

GMC believes that KB has the potential to host a resource capable of feeding an operation much larger than the Plant's excess capacity, given the geological similarities between it and the Madneuli Mine.  However, by initially focusing on delivering this short term resource target via a diamond drill programme of up to 10,000 metres, the Company will be well positioned to generate cash flow at low operating cost and in the near term by leveraging the benefit presented by the excess capacity available at the Plant.  The cash flows generated will then be used to fund the development of a larger resource at KB as well as other target areas within the Company's 860 sq km tenure. 

GMC's Managing Director, Greg Kuenzel said, "This raise is a significant endorsement of our approach to commence production at low cost and for a minimum capex requirement at KB and I would like to thank our new and existing shareholders for their support.  Having determined that KB has significant resource potential, the Company and its JV partner in Georgia, are now defining the optimal parameters for exploiting this in a way that will enable us to maximise the copper-gold deposit at KB, whilst successfully leveraging on the opportunity to deliver revenues.  We look forward to providing updates regarding our forthcoming drill programme, which we anticipate commencing in the short term."

Placing Shares

The Placing Shares will rank pari passu in all respects with the existing ordinary shares of no par value in the capital of the Company.  Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM ('Admission').  It is expected that Admission will become effective on or around 22 November 2016.

As a result of the issue of the Placing Shares as described above, the issued share capital of the Company now consists of 80,424,853 ordinary shares of no par value.

Warrants

The Company has agreed to issue warrants over a total of 267,750 ordinary shares in the Company exercisable at 10p per share for a period of two years from date of grant to SP Angel Corporate Finance LLP (Nominated Adviser and Joint Broker) and Shard Capital Partners LLP (Joint Broker).

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

**ENDS**

For further information please visit www.georgianmining.com  or contact:

Greg Kuenzel	Georgian Mining Corporation	Company	Tel: [phone]
Martyn Churchouse	Georgian Mining Corporation	Company	Tel: [phone]
Ewan Leggat	S. P. Angel Corporate Finance LLP	Nomad & Broker	Tel: [phone]
Laura Harrison	S. P. Angel Corporate Finance LLP	Nomad & Broker	Tel: [phone]
Damon Heath	Shard Capital Partners LLP	Joint Broker	Tel: [phone]
Elisabeth Cowell	St Brides Partners Ltd	PR	Tel: [phone]

Competent Person Statement

The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by James Royall, who is a Member of the Australian Institute of Geoscientists.

James Royall has sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and as a qualified person as defined in the the Note for Mining and Oil & Gas Companies which form part of the AIM Rules for Companies.   James Royall has reviewed this announcement and consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

About Georgian Mining Corporation

Georgian Mining Corporation has 50% ownership and operational control of the Bolnisi Copper and Gold Project in Georgia, situated on the prolific Tethyan Belt, a well-known geological region and host to many high grade copper-gold deposits and producing mines.The Bolnisi licence covers an area of over  860 sq km and has a 30 year mining licence with two advanced exploration projects; Kvemo Bolnisi and Tsitsel Sopeli. These projects are proximal to existing mining operations which are owned by the Company's supportive joint venture partner. Georgia has an established mining code and is a jurisdiction open to direct foreign investment.

 

END

 

 

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