Tanzanian Royalty Exploration Corporation (TSE: TNX; NYSE MKT: TRX) received the first USD1.25m tranche of USD5m financing for mining development at its Buckreef gold mine.
The funds will be used by the company to expand its production team necessary to boost development of the Buckreef gold mine in Tanzania.
The capital is raised through a private placement of securities with Crede CG III, a wholly-owned subsidiary of Crede Capital Group, a private equity firm which invests in emerging growth companies.
James Sinclair, CEO of Tanzanian Royalty, comments: “This financing provides the company with the foundation to capitalize on our unique opportunities in the Buckreef region of Tanzania. The funds will be immediately deployed to add skilled local workers and contractors and to acquire the module to complete the Gravity CIL production circuit for our Buckreef mine. With development capital just starting to come back into gold mining, we believe the financing is very well timed.”
In the initial round of financing, Tanzanian Royalty privately placed 1,840,400 shares of its common stock and warrants for USD1.25m.
In the second round of the financing, the company is expected to issue a convertible note and warrants for USD3.75m.
The Buckreef mining gold project is located in north-central Tanzania, south of Lake Victoria and 110km southwest of Mwanza.
The project area comprises the dormant Buckreef Gold Mine and four prospects with known mineralization: Buckreef, Buziba, Tembo and Bingwa.
According to the company, the measured and indicated resource at Buckreef is 8.882Mt and 21.264Mt at Buziba.
The Buckreef Project is a joint venture between Tanzanian Royalty with 55% shares and State Mine Corporation (Stamico) holding the remaining 45%.