Shanta Gold (LON:SHG) has raised £15.1 million through a share placing.
The company said that the new funds will help it transform from an explorer into a producer, by bringing first production at the New Luika gold mine in Tanzania. Production is scheduled for December 2011.
Through the placing, Shanta will issue 83.9 million new shares at 18 pence each.
"We are very pleased to have received such a high level of support from new and existing institutional shareholders for this capital raising,” said chairman Walton Imrie.
“We remain on track to bring the New Luika Gold Mine into production in December of this year.
“The New Luika Gold Mine is targeting production of 175,000 - 190,000 ounces of gold for the first three years and has the opportunity to be very cash generative. Furthermore, we are able to finance the initial exploration activities in the Lupa Goldfield to meet the agreement with Canadian listed Great Basin Gold."
Shanta has also arranged a US$3.4 million working capital loan facility with Yorkville Advisors. The loan is backed by an existing equity line facility that was set-up between Shanta and Yorkville in December 2009.
The company will pay a 8 percent coupon on any draw down and the facility is repayable monthly, with the final repayment in July 2012.