Soma Gold (TSX-V:SOMA) has arranged a non-brokered private placement to raise up to C$7.5 million ($7.7 million) through the issuance of 10 million shares at C$0.75 cents each.
Soma Gold plans to use the net proceeds to finance capex to expand production at its Escondida and Aurora mines, complete the installation of ore sorting equipment, and accelerate exploration activities at the Escondida property.
The funds will also support working capital to prepay for ore purchases from small legal mines near the company’s mills, as well as general corporate purposes.
“This financing positions Soma to accelerate production growth … that we expect will have a meaningful impact on our output and margins,” Chief Executive Officer Geoff Hampson says.
The offering is scheduled to close on or about 19 June, subject to regulatory approvals, including conditional approval from the TSX-V.
Integrity Capital Group Inc is acting as financial adviser and may receive fees of up to 7% of gross proceeds, as well as broker warrants exercisable at C$1.10 per share for 24 months.
The company has also completed a previously announced debt settlement transaction, issuing 23.4 million shares at a deemed price of approximately C$1.10 per share, to settle C$25.8 million owed to Conex Services Inc.
Soma Gold operates two mills in Colombia with a combined capacity of 675 tonnes per day and holds over 430km2 of mineral concessions along the OTU fault in Antioquia.
Write to JC Villarba at Mining.com.au
Images: Soma Gold
