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Patagonia Gold hails funding as endorsement of plans

Last updated: 23:46 09 Dec 2014 AEDT, First published: 00:46 10 Dec 2014 AEDT

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Patagonia Gold’s (LON:PGD) £8.2mln funding was one of the largest raises by an AIM-listed gold company in the second half of 2014, according to Cantor Fitzgerald.

It was 94% of the amount the company could have raised through a subscription and open offer at 4.5p. Cantor added it was also further evidence of the willingness of management and the Miguens family-led concert party to provide financial support.

Bill Humphries, managing director, said: “In addition to the significant subscriptions by the Miguens family, 87% of the open offer was taken up by shareholders who have given an overwhelming vote of support for our future plans in this very harsh market.”

In total, chairman and largest shareholder Carlos Miguens invested £3.89mln, or 47% of the combined placing, and the overall family shareholding rose from 29.2% to 32.3%. 

Of the management, Miguens’ own stake increased to 20.18% from 15.44%, Humphries now holds 2.95% from 2.74% and finance director Gonzalo Tanoira 0.97% from 0.4%. 

Cantor said the funds, along with existing cash flow from the Lomada gold operation, should allow the company to complete the Phase I and II pre-feasibility studies on the Cap-Oeste project and construct the Phase I, 50,000/year heap-leach operation next year. 

Cash remaining will also allow for a ramp up in the wider exploration programme on the El Tranquilo block.

Buy with a target price of 15p, said Cantor.

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