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Drummond Gold to raise A$3.37m for Drummond basin gold exploration

Last updated: 18:39 19 Nov 2010 AEDT, First published: 17:39 19 Nov 2010 AEDT

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Drummond Gold (ASX: DGO) will make a placement of 29.35 million fully paid ordinary shares at an issue price of $0.115 per share to raise $3,375,250 for its exploration activities in the Drummond basin in Queensland and to provide additional working capital.

The placement of 29.35 million shares will be made in two tranches. The first tranche will comprise of 25 million shares at an issue price of $0.115 per share raising $2,875,000 will be placed to an institutional client of Morgan Stanley Smith Barney.

The second tranche comprising of 4.35 million shares at an issue price of $0.115 per share raising $500,250 will be placed to Resource Capital Fund V L.P. subject to a shareholder approval at the General Meeting of Shareholders.

The applications for shares have been arranged through Azure Capital Limited.

The company has agreed to pay to Azure a completion fee of $135,000 payable in cash upon successful completion of the placement and to reimburse reasonable their out of pocket expenses.

Of the properties being explored by Drummond Gold, Mt Coolon, Glen Eva and Conway appear to have characteristics of the bonanza style, while Yandan and Eugenia appear to be bulk epithermal in style.

DGO shares are currently trading at 12.5 cents.

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