21st Jan 2014 11:26
LONDON (Alliance News) - Touchstone Gold Ltd Tuesday said that if it cannot find additional funding it will not be able to meet scheduled payments to vendors of its concession contracts.
The company, which suspended all exploration activities during 2013 after being hit hard by the fall in the gold price, said it is now possible that the concession contracts may have to be ceded back to the vendors and Touchstone may lose all or part of its interest in those concessions to which the non-payment relates.
Touchstone said it continues to be engaged in a number of strategic conversations in order to achieve the necessary fundraising.
The company also said it has managed to enter into an agreement to grant 6.5 million shares at a price of 0.932 pence per share by way of a private placement.
The gold mining company, with operations in Colombia, said consideration of 0.230 pence per share will be paid initially with the remaining 0.702 pence to be paid when called upon by the directors.
The shares are to be subscribed equally between company Chairman Robert Buchan and ECK Partners Holdings Ltd.
ECK Partners has additionally agreed to convert GBP20,000 of outstanding payable from Touchstone, at a price of 0.932 pence per share, into 2.1 million shares in the company.
The company said net proceeds will be used for general corporate purposes.
Touchstone Gold shares were down 42% to 0.700 pence, making it the biggest AIM faller Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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