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16 Mar 2021 | 11:52

Conroy Gold raises £2.25m to strengthen balance sheet

(Sharecast News) - Ireland and Finland-focussed exploration and development company Conroy Gold announced a £2.25m financing on Tuesday, to strengthen its balance sheet and working capital position. The AIM-traded firm said the financing was being undertaken through a placing and subscription to raise a total of £1.87m, as well as the conversion of £0.38m of existing debt into new shares.

It said the financing was arranged at a price of 33p per share, with each new share issued coming with a one-for-one warrant exercisable at 50p per share, with a two-year term.

A super warrant would also be issued on a one-for-one basis for any financing warrants exercised before 31 December, each being exercisable at £1 per share, expiring on the second anniversary of the financing's completion.

The board said the funds raised would be used to support activities on the proposed joint venture with Demir Export, as well as to meet the commitments and associated costs on its various licences in Ireland and Finland, for exploration drilling on the copper-gold licences in Finland, and for general working capital.

"Conroy Gold has engaged with Demir Export on a proposed joint venture covering the company's gold projects in the Longford-Down Massif," said chairman Richard Conroy.

"Demir Export belongs to the Koç Family, who also own the largest industrial conglomerate in Turkey, a Fortune Global 500 company and Turkey's leading investment holding company.

"The letter of intent signed in respect of the joint venture proposal would also provide the considerable injection of working capital needed for the development of commercial mining operations at Clontibret and elsewhere along our district-scale gold trend."

Conroy said that the proposed joint venture, if completed, would mean a further €1m payment being made to the company, together with an initial €9m of expenditure over two phases, which would earn Demir Export a 40% interest in the Longford Down Massif projects as a whole.

"The third phase which will see expenditure by Demir Export of the additional funds required to reach declaration of construction-ready status for Clontibret and other mine developments will earn an additional 17.5% interest in the developments, thus increasing Demir Export's holding to a total of 57.5% in those developments," Richard Conroy explained.

"At this point Conroy Gold would retain a 42.5% interest with various further options including a 'carry loan' on capital expenditure to commercial production, enabling Conroy Gold to retain an externally-funded 25% project interest with minimal further cash outlay.

"This ongoing ownership aspect was a particularly key element of the joint venture for the company."

In the Longford-Down Massif, Conroy said the firm had already delineated an existing JORC-compliant gold resource of 517,000 ounces, and a series of targets across the 65 kilometre-long district scale gold trend.

"The existing resource has been generated from drilling covering a small fraction of the Clontibret gold target, with the majority of drilling to a depth of less than 200 metres and a maximum depth of 350 metres.

"The Clontibret deposit is geologically comparable to the Fosterville deposit in Victoria, Australia."

Engaging with Demir Export was "exactly what is needed" to accelerate Conroy's exploration and mine development activities, the chairman said.

At 1455 GMT, shares in Conroy Gold and Natural Resources were up 5% at 34.65p.
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