FML Raises $40m to accelerate production and exploration programmes > Download

CAPITAL RAISING TO INCREASE GOLD PRODUCTION TO 130,000oz & ACCELERATE EXPLORATION

– $32.3 MILLION PLACEMENT AND $7 MILLION SPP –

• Strongly supported institutional share Placement to raise up to $32.3 million at $0.076 per share with SPP at the same price to raise up to $7 million
• Funds raised to underpin strategic plan to lift gold production to 130,000oz a year in calendar 2012 from expanded mine development programme
• Capital raising will enable Focus to accelerate exploration at the highly prospective Treasure Island Gold Project
• Marks key milestone towards achieving Focus’ objective of becoming one of the largest gold producers in the Goldfields

Australian gold producer Focus Minerals (ASX: FML) is pleased to announce a circa $40 million equity raising to accelerate key production and exploration programmes and underpin its objective of lifting annual gold production from its WA operations to 130,000oz in 2012.

Specifically, the proceeds of the capital raising will be used to:

• accelerate exploration at Focus’ greenfields Treasure Island Gold Project, where a major drilling programme recently commenced;
• expand production and development work at Focus’ new high-grade underground mine, The Mount;
• bring forward plans to increase Focus’ reserves at its Greater Coolgardie gold projects, setting them up to move into production; and
• provide increased cash reserves and general working capital.

The capital raising comprises a $32.3 million Placement to institutional and sophisticated investors with the issue of 425 million ordinary shares at an issue price of $0.076 per share; and a $7 million Share Purchase Plan (SPP) to be launched enabling all existing eligible shareholders to Subscribe for up to $15,000 worth of shares at an issue price of $0.076 per share.

The Placement received strong support from a number of the company’s institutional shareholders and has also allowed the introduction of a number of new international and domestic institutional investors to the Focus share register. Further details in relation to the SPP will be provided to shareholders in a separate mailing shortly.

Focus Minerals’ Chief Executive Campbell Baird said the capital raising would underpin the Company’s strategic three-year growth plan to become one of the largest gold producers in the Goldfields.

“We have a wealth of organic growth opportunities which can be highly value-accretive for shareholders and, in the current strong gold price environment, we see a clear window of opportunity to accelerate our growth and build significant long-term value for shareholders by extracting the maximum value from these assets,” he said.

Mr Baird said strong cash flow generation from the Company’s existing Tindals Mining Centre underground operation had enabled the Company to build its new high-grade underground mine, The Mount, which recently went into production as well as undertake pre-development work for the Tindals open pits and commence drilling at Treasure Island.

He said the capital raising will enable Focus to accelerate this current expansion as well as bring into play additional growth opportunities including the Greater Coolgardie assets.

“We have put together a major exploration and development programme that will see us aggressively expand our business into a rising gold price,” said Mr Baird.

“These activities see us well down the road to delivering 130,000oz of gold in calendar 2012, but it is in 2013 where we are targeting our production output to rise significantly as we look to advancing both the Greater Coolgardie projects, where we already have one million tonnes worth of mining in reserve, and also our highly prospective Treasure Island Gold Project at Lake Cowan.

“Treasure Island is particularly exciting for shareholders as it has the right geological address and has delivered some exceptional surface samples.  We are therefore looking to unlock its potential for shareholders as quickly as possible through a comprehensive exploration programme.”

Mr Baird said that delivering on its three year plan would turn Focus into a strong cash flow generation vehicle with geographic diversity, a significant production profile and increased operational flexibility.

“What sets us apart is that we have the organic opportunities already within our grasp, and we have consistently proven over the last three years that we can and will deliver on our plans,” he added.

The Placement is being undertaken pursuant to the company’s capacity under ASX Listing Rule 7.1.  The company’s Corporate Advisor, Hartleys Limited, is Broker to the Offer for both the Placement and the SPP.