Asante Gold Corporation has successfully secured $35 million closing the second tranche of its $100 million financing efforts.
This milestone, the corporation says is a resounding vote of confidence in the operations of the company which will support the ambitious growth plans the mining company envisages.
Asante Gold Corporation is on an agenda to raise $100 through non-brokered private placement; selling its shares or securities directly to investors without using an intermediary, such as a broker or investment bank.
The $100 million is expected to be raised in three tranches. The first phase of the private placement raised $25 million. The second phase which just closed was able to raise $35 million from mainly local investors who agreed to exchange the company’s debt for shares at a price of CS$ 1.50.
This means that instead of cash payments, creditors of Asante Gold, i.e. its suppliers and service providers have chosen to invest in the company which the mining firm says signifies that they believe in the company’s long-term success and hence their willingness to accept shares as payment.
A statement released by the company further revealed that this second tranche issued 31,896,857 common shares aimed at settling the outstanding debts of the corporation.
Following the closure of the second tranche of the private placement, Dave Anthony, the President and Chief Executive Officer (CEO) of Asante Gold noted that the large participation by investors in the placement is a testament of investors’ confidence in the company.
“Subsequent to the Company’s financing package announcement on October 30th, several Ghanaian service providers embraced the opportunity to participate in the private placement. Therefore, the second tranche of our US$100 million private placement has been configured to settle a variety of short-term liabilities through issue of equity,” he announced.
He added that “this represents a significant vote of confidence in the long-term future of Asante by key Ghanaian suppliers and partners who have chosen to participate as shareholders in the Company.”
The third tranche of the $100 million equity financing, worth $40 million, is expected to close around December 5, 2024. Under an updated agreement with a strategic investor, announced on September 24, 2024, the investor will contribute the $40 million by purchasing shares at a price of C$1.50 each.
This third tranche, Dave Anthony says will focus on accelerating the development of both Bibiani and Chirano mines.
“With these short-term liabilities now addressed, we continue to focus on accelerating the completion of the remaining elements of our financing package, which will fully fund our growth plans at Bibiani and Chirano,” he indicated.
Experts believe the development and expansion of Bibiani and Chirano by Asante Gold Corporation means job opportunities are likely to increase, and local businesses may see a surge in activity as the company deepens its operations. Furthermore, Asante’s ability to secure significant financial backing reflects positively on Ghana’s mining sector as a whole.
