Georgian Mining raises $7m in oversubscribed placing

Georgian Mining Corporation announced on Tuesday that it had raised $7m (£5.46m) by way of a “significantly oversubscribed” placing and subscription of 34,149,638 new ordinary shares of no par value in the capital of the company, with new and existing shareholders, at a price of 16p per placing share.

The AIM-traded business said the net proceeds of the placing would be primarily used to expand the resource development at the Kvemo Bolnisi copper and gold project in Georgia beyond the existing JORC estimate of 2.22 Mt at 0.8% copper and 0.1 g/t gold, as well as to advance regional exploration.

It explained that the project was located on the Tethyan Belt, which is host to multiple high grade copper-gold deposits and producing mines in Turkey, Armenia, Serbia and Georgia.

The company said it believed KB had the potential to host one large epithermal copper/gold deposit, and a three phase resource development programme was underway to reach the company's 50Mt exploration target for KB, which was just one of 14 target areas identified within the 860 square kilometre licence area.

Having achieved and exceeded its stage one target of 1-2Mt of combined copper-gold sulphide and gold oxide mineralisation, GEO said it was currently undertaking drilling to realise its stage two resource target of 3-5 Mt in 2017.

Results to date had delivered exceptional copper and gold grades, including 16m at 15.4% copper from 47m, including 4.95mat 40.50% copper.

In tandem with its resource development work, the company said it was also working to deliver proof of concept copper and gold production using its joint venture partner's processing infrastructure, which had excess capacity and was located in close proximity to KB.

That would de-risk the project by defining the processing route for the ore, provide cash flow to contribute towards further exploration and strengthen the relationship with the company's partner, the board explained.

Discussions with the company's joint venture partner were ongoing, and further updates would reportedly be made on completion.

“KB continues to deliver excellent grades from drilling which validate our belief that we are developing a significant copper and gold deposit,” said managing director Greg Kuenzel.

“The second half of 2017 is set to be very active with work on both an upgraded resource and proof-of-concept production on track to be delivered this year.

“This, we believe, will put the company on the map as a significant Tethyan Belt play.”