Troy Resources is seeking shareholder approval for a series of agreements that would convert current debt into equity and raise funds to pursue its Smarts Underground project at its Karouni gold mine in Guyana and restart trading on the ASX. The company plans to convert approximately $18.7 million of debt to equity and issue shares at $AU0.022 to raise somewhere to the tune of $7.2 million to progress its mining operations in South America.
Troy is pursuing the recapitalisation to improve the company’s financial status which will then allow it to take full advantage of its assets in South America.
Money raised will go towards kicking its Smarts Underground project into action. The project already has a solid reserve base of 1,082,000 tonnes grading 2.6 grams per tonne gold for 89,400 ounces of gold.
The Smarts Underground project is considered by the company to have significant upside potential to grow its current reserve base further.
Additionally, the Smarts Underground project has already received the majority of approvals required from the Guyanese authorities to proceed with developing its mining operation.
The initial phase of development at Smarts is estimated to cost approximately $10m based on the pre-feasibility study undertaken in mid-2021.
Troy is currently in discussions with multiple nearby companies that have other mineral deposits close to Karouni for potential toll treating options. Additionally, the company may decide to reinstate its Karouni mill that is currently on care and maintenance pending the results of a final investment decision.
Other projects nearby Karounie could also be jolted back into life if Troy raises sufficient funds. Projects in consideration include re-commencing drilling at its nearby Gem Creek prospect and other greenfield areas surrounding the mine. Exploration activities at Gem Creek and other prospective greenfield areas would aim to locate additional ore sources to supplement the Smarts Underground operation.
Intriguingly, gold mining heavyweight, Barrick Gold Corporation, has farmed into various tenements at Karouni and has commenced work already. Troy will remain the non-operating partner in the earn-in agreement.
Troy Resources Non-Executive Chairman, Peter Stern said:
“The recapitalisation will allow us to get on with the various tasks at hand – progressing plans for the development of the Smarts Underground Project and, if the rights issue raises sufficient funds, continuing to explore our highly underexplored but highly prospective ground position.”
With solid ounces in the ground patiently waiting for the sharp end of an underground boggers shovel, Troy now appears to be in a steady position ahead of approval of its strategic recapitalisation. The strategy is intended to kick its mining activities in South America back into gear and its shares trading again on the ASX.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
