Brisbane, Nov 6, 2007 AEST (ABN Newswire) - The Board of Republic Gold (ASX: RAU)("Republic" or the "Company") today announces that it has arranged a placement of 76,434,220 shares to a group of sophisticated investors at a share price of 7.5 cents. Funds raised from this placement total $5,732,566.50. The placement pricing is based on an approximate discount of 15% on an estimate of the volume weighted average share price over the last five days, in line with the pricing of the Company's previous placement.
The Company intends to use the proceeds from the Placement Shares for:
(a) submitting an offer to be made by the Company to purchase the Mt Carbine Tungsten Project,
(b) undertaking further drilling at Mt Carbine, and
(c) to provide additional working capital.
The Company has been expending considerable effort on completing due diligence on the Mt Carbine Tungsten Project over the past few months. The current exclusive option period for Mt Carbine expires in late November. The funds raised in this placement put the Company in a strong position to be able to followup the due diligence as soon as it is successfully completed and to formulate a viable purchase offer for the project that is acceptable to both parties.
Upon a successful purchase of Mt Carbine, these funds would also enable the Company to commence a significant drilling programme to define a tungsten resource for Mt Carbine and to commence further metallurgical testwork and treatment plant design work to complete a Feasibility Study on the retreatment of the tailings in the No 4 Tailings Dam. Currently this is considered the most likely first step in the redevelopment of Mt Carbine into a significant tungsten project and would afford the Company the quickest route to generate cash flow. Tungsten prices remain strong, with recent prices being in the range of US$236-US$240 per mtu.
The recent surge of the gold price through US$800 per ounce has translated into a healthy rise in the Australian price for gold to over AUD$870 per ounce. The price of antimony metal is also very strong at approximately US$5,300 per tonne. The antimony price rise is in part due to a stricter environmental regime in China, the world’s dominant source of antimony. The combination of the price rises for these two metals augers well for the Company's gold and antimony resources in Far North Queensland.
Contact
Greg Barns
TEL: +61-419-691-846
John Kelly
TEL: +61-418-577-759
Republic Gold Limited
E-mail: info@republicgold.com.au
www.republicgold.com.au
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