The issue is being made at 12c, which is at a discount to the company’s recent trading range of between 14c and 16c. Gindalbie has decided not to seek an underwriter for the issue.

Gindalbie managing director, David McSweeney, said the issue was the first time since listing in 1994 that it had tapped on the shoulder of shareholders for more capital.

“This entitlement issue gives our shareholders an opportunity to subscribe for additional shares at a discount to our recent trading price range prior to any re-valuation taking place,” McSweeney said.

Gindalbie started work on a bankable feasibility study for Minjar in July this year. Subject to approvals and funding it hopes to be producing gold at a rate of 40,000 ounces per annum from 2001. The BFS is scheduled to be finished by January.

“Our shareholders are aware that we have been fast-tracking the Minjar project and developing plans to be in a position to return to producer status in 2001,” McSweeney said.

“We have also secured an interim funding facility for up to $2 million from Macquarie Bank.”

Mining at Minjar will initially focus on exploiting known resources. However, Gindalbie plans an aggressive drilling program to find more open pittable oxide ore.

“We control over 800 square kilometres of exploration tenements at Minjar with good prospects and potential for more oxide ore on granted mining leases,” McSweeney said.

“The fact that the region has not been subject to any modern era gold mining activities leads us to believe that we will quickly extend the initial three-year life currently proposed.”