Southern Gold Limited (ASX:SAU) has responded to excess demand for its 1-for-3 non-renounceable rights issue that raised $2.3 million with a $440,000 post-rights issue placement to four major shareholders.
The company has taken this step after taking account of the strong support received from several major shareholders over the last 12 months.
Subscription agreements have been entered with four shareholders under provisions open to sophisticated investors.
READ: Southern Gold receives more than 28.6 million new share applications in oversubscribed rights issue
This placement, which is non-brokered and free of commission, is for 4 million shares at 11 cents per share and will add $440,000 cash to the $2.3 million rights issue funding.
Funds will be used to augment working capital to ensure drilling operations in South Korea continue uninterrupted until the start of the winter season in December.
READ: Southern Gold board of directors’ participation in rights issue nets shares worth more than $50,000
The terms are identical to the recent rights issue and include a 1-for-2 attached 18 cent call option exercisable until December 31, 2021.
Southern Gold will seek approval for the placement from shareholders at the next annual general meeting which is expected in October 2019.
The company has a large portfolio of high-grade gold projects in South Korea that are largely greenfield epithermal gold-silver targets in the country’s south-west.
A 50% equity interest is also held in a joint venture company looking to commission a small-scale mine at the Kochang or Gubong project within the next 12 months.
Southern Gold has started drilling at the Beopseongpo project with an initial scout program of around 500 metres at the Lotus North vein system adjacent to the historic mine.