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SolGold strikes revised US$36.5mln Maxit investment

SolGold executive director Nick Mather said: "We are enthused by the speed with which Maxit has grasped the scale and class of this Tier 1 project."

SoldGold's Cascabel project is a porphyr project in Ecuador

SolGold plc (LON:SOLG) shares surged as it revealed it's set to receive up to US$36.5 million in a premium placing from Maxit Capital to advance its exciting Cascabel gold and copper property in Ecuador.

This is a revised investment agreement with Maxit, which was reported last month and was for up to US$20mln.

SolGold executive director Nick Mather said: "We are enthused by the speed with which Maxit has grasped the scale and class of this Tier 1 project. 

"The funds will enable aggressive drill testing of the other seven priority targets in the Cascabel cluster, and the definition of a maiden resource at Alpala."

Maxit will subscribe for up to 268.8mln shares at US$0.08 each for gross proceeds of US$21.5 million. The price represents a whopping 97% premium to the company's closing mid-market share price prior to the announcement and a 28.9% premium to the closing price on Friday (July 29).

There is also the option to buy a further US$15 million of placing shares, SolGold said.

SolGold shares are up over 13% to 5.31p at the time of writing.

Maxit is entitled to appoint a representative to the SolGold board.

The proceeds will be used for working capital and the continued advancement of the Cascabel Project in Ecuador, which is owned by Exploraciones Novomining SA in which SolGold holds 85%.

Maxit is entitled to receive a fee of 6% of the gross proceeds raised which may  be satisfied in shares. It will also be issued warrants for 6% of shares issued, half of which are exercisable at 14p and half exercisable at 28p and have 24 month exercise period.

Cascabel has 14 identified targets, and has seen world class drilling intersections, high copper and gold gradesl. It is near to roads, port and power services.

So far, SolGold has only drill tested one of the 14 targets - named Alpala.

Quick facts: SolGold plc

Price: 35.9 GBX

Market: AIM
Market Cap: £748.2 m

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