Tesoro Resources on a Trading Halt for Cap Raise (ASX:TSO)
Tesoro Resources Ltd [ASX:TSO] is on a trading halt today after announcing they’ll be raising capital. The TSO share price is currently stuck at 6.9 cents.
Tesoro Resources is an ASX-listed gold explorer that’s been around since 2017. Tesoro’s main focus is the El Zorro gold project, which is located in Chile. The project comprises 10,000 hectares and is located 140 km from Copiapó in northern Chile, and 15 km from the Pan American Highway.
What’s going on with Tesoro Resources?
The company is looking to raise close to $6 million before costs to fast track their exploration and development program in El Zorro.
They will be raising around $3.3 million by placing shares through institutional, sophisticated, and professional investors. Also, they are looking to raise an extra $2.72 million through institutional and retail investors and on the basis of one per every eight shares.
The offer price is six cents per new share, or a 13% discount from their 11 June closing price.
With the money the company is looking to start a 4,000–5,000m drilling program to begin in July 2020, but also conduct an exploration and resource estimation, a detailed metallurgical test work program, and a Scoping Study early next year.
According to the company, El Zorro could hold a ‘significant gold deposit’. They’ve had some positive drilling results, with six 100g/m gold intercepts.
What could happen next?
So far, Tesoro’s share price has increased by 146% since February this year, yet the new offering could pull the share price down once it begins trading.
It’s hard to pick winning gold explorers, some will strike gold, while others will run out of money. Gold explorers are one way to get exposure to gold, another is to buy gold directly.
If you are interested in knowing more about how to invest in gold, check out Shae Russell’s step-by-step guide on the ‘Best Way to Buy, Sell and Store Gold’.
To read this FREE report, click here.
For The Daily Reckoning Australia