Austindo to raise funds to finance troubled Banten gold project

ASX-listed mining firm Austindo Resources Corporation announced on Thursday that the company will undertake a combination of placement and right issue to raise A$20.9 million.

The funds from the Placement and Rights Issue will be used finance the ongoing development of the Cibaliung Gold Project in Banten, in which the company has an 89.75% interest. The fund is expected to be sufficient to enable the company to reach first gold pour from the Cibaliung Gold Project, the company said.

?The company will, however, require further funding to complete the project and produce positive cash flow and to fund further exploration. The Board of Austindo is proposing that at an appropriate time the company will consider a further equity raising to complete the balance of the US$35 million funding requirement,? the company said.

Austindo?s Cibaliung gold project had been hit by some technical difficulties, including delay in decline development that had caused costs to soar and gold pour commencement postponed from original schedule of early 2007.

The Cibaliung gold project will produce some 70,000 ounces of gold equivalent annually for 6 years, with mining would be carried out by conventional underground cut and fill stopping with decline access.(denny)