Tesoro locks investors in for $3 million placement

Tesoro Gold (ASX:TSO) has tapped investors for $3 million to advance work across its El Zorro Gold Project in Chile, South America. 

The $20 million market capitalisation company says funds will be raised via a placement of 166.7 million new shares to institutional and sophisticated investors $0.018 per share. 

This price represents a 5% discount to Tesoro’s last closing price of $0.019 and a 10% discount to its 5-day volume weighted average price (VWAP) of $0.020. 

The company says the funds will be applied to drilling, project studies, and new regional target generation across the Drone Hill and Ternera prospects, as well as across district targets in the El Zorro area.  

Tesoro plans to issue the new shares in 2 tranches, with the first tranche including just under 97.4 million shares to raise about $1.753 million. Tranche 2 will see about 69.3 million shares issued to Corporate International Holdings BV, a wholly owned subsidiary of Tesoro’s strategic partner, Gold Fields (NYSE:GFI), subject to shareholder approval. 

Through the second tranche, Gold Fields will bump its shareholding in Tesoro up to 19.05%.

Unified Capital Partners has been appointed as lead manager to the placement and will receive a 6% management and selling fee on all funds raised under the placement. 

Tesoro notes it will also issue the lead manager 2 million options exercisable at $0.027 each and expiring 24 months from the date of issue. 

The issuing of the shares is scheduled for 18 January 2024.

Tesoro Gold Managing Director Zeff Reeves says these funds, in conjunction with an imminent value-added tax (VAT) of about $4 million, will pave the way for the company to ‘aggressively’ advance El Zorro.

“We have worked closely with the Gold Fields technical team since their initial investment in November 2022, and their ongoing support validates the company’s view that the El Zorro Gold Project is a significant asset that warrants further exploration and advancement on both the 1.3 Moz Ternera Gold Deposit and our highly prospective district target.”

[Gold Fields’] ongoing support validates the company’s view that the El Zorro Gold Project is a significant asset…”

The company is focused on acquiring, exploring, and developing mining projects in the Coastal Cordillera region of Chile. 

Tesoro’s 95% owned Chilean subsidiary owns 93.8% of the El Zorro Project. 

As of 30 September 2023, Tesoro had $1.044 million cash and cash equivalents at hand according to its latest quarterly report.

Write to Adam Drought at Mining.com.au

Images: Tesoro Gold
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.