Rua Gold raising $5.0 million for New Zealand project
Rua Gold Inc. [RUA-TSXV, NZAUF-OTC, A4010V-WKN] said has arranged to raise $5.0 million from a brokered offering of common shares and will use the net proceeds for continuing exploration at its Reefton project in New Zealand and for general working capital and general corporate purposes.
It said the offering will consist of 8.3 million common shares priced at 60 cents per share. The offering is expected to close on or about February 20, 2025.
The company said it has granted the agent an option to sell at the offering price, up to 1.25 million additional common shares (representing 15% of the number of shares issued in the offering) for market stabilization purposes and to cover overallotments, if any. The option can be exercised for 30 days after the closing date.
On Thursday, the shares eased 7.7% or $0.05 to 60 cents and currently trade in a 52-week range of $1.26 and 55 cents.
Rua Gold (formerly First Uranium Resources Ltd.) is a new entrant to the mining industry, specializing in gold exploration and discovery in New Zealand. With permits that have a rich history dating back to the gold rush in the late 1800s, Rua Gold said it combines traditional prospecting practices with modern technologies to uncover and capitalize on valuable gold deposits.
Historical mining in the Reefton Goldfield started in 1872, and by its close, had produced two million ounces of gold from high-grade underground operations in orogenic quartz veins systems.
In a press release on July 15, 2024, Rua said it had entered into a definitive share purchase agreement, enabling it to acquire 100% of the issued and outstanding shares of Reefton Resources Pty Ltd., a unit of Siren Gold Ltd [SNG-ASX], with tenements located adjacent to the company’s suite of properties in the Reefton Goldfield.
It said the transaction would establish Rua as the dominant landholder in the Reefton Goldfield on New Zealand’s South Island, with approximately 120,000 hectares of tenements. The company said the Reefton Goldfield is seeing a resurgence of interest, led by the construction of Federation Mining’s Blackwater mine, which is expected to produce 70,000 ounces of gold annually at an all-in-sustaining cost of US$738 an ounce.
Under the deal, Siren was scheduled to receive A$2.0 million in cash ($1.8 million), of which A$1 million was paid at the close of the transaction. Siren will also received 83.9 fully paid shares of Rua, representing A$18 million ($16.6 million).
The transaction left Siren with a 30% stake in Rua, with Siren Chairman Brian Rodan agreeing to join the Rua board.
Rua’s Glamorgan project is located on New Zealand’s North Island, in the Hauraki district, a region that has produced 15 million ounces of gold and 60 million ounces of silver. Glamorgan is adjacent to OceanaGold Corp.’s [OCG-TSX]  biggest gold mining project, Wharekirauponga.
On Thursday, Rua shares eased 5.0% or $0.01 to 19 cents. The shares trade in a 52-week range of 28 cents and 10 cents.