Mandalay Resources Corp (TSE:MND), the metals miner, said it now had the "financial footing" to grow both production and exploration now that its shareholders had given the green light to its previously announced financing transaction.
In February this year, the firm unveiled a C$43 million offering from the sale of 359.4 million subscription receipts at $0.12 each as well as a US$8 million convertible bridge loan from an affiliate of CE Mining.
Shareholders have now approved the conversion of 359.4 million subscription receipts into the same number of common shares of and the conversion of a US$8 million convertible bridge loan provided by an affiliate of CE Mining into over 99.3 million shares.
Mandalay said the net proceeds were intended to fund working capital requirements, including capital development work at its Costerfield mine in Australia, and tailings upgrade and capital development requirements at Bjorkdal in Sweden.
The funds will also be used for debt restructuring, including establishing a cash reserve relating to the US$24.1 million principal amount outstanding of senior exchangeable gold bonds, and future planned exploration activities at high potential areas.
"We appreciate the support and confidence of our shareholders – from those participating in the financing, to those who voted to approve it," said Dominic Duffy, president and chief executive at Mandalay, in a statement on Friday
"With this financing now complete, Mandalay is able to not only meet all of its liquidity requirements but now has the financial footing to grow both its production and exploration profiles. We are focused on putting these funds to work to improve on operations, to create value for all of our shareholders through exploration, and to lay the foundation for an exciting future which begins with a return to being a profitable, producing mining company by the end of 2019."
CE Mining is now Mandalay's largest shareholder and owns 25.5% of the issued and outstanding shares. Under the terms of the Bridge Loan, it also has the right to nominate an additional member to the board.
Contact Giles at [email protected]