Orinoco Gold Limited (ASX: OGX) is a gold mining and exploration company. On 3 January 2018, the company has stated that the suspension of the scrips has now been lifted, post the announcement regarding the capital raising by the company.
The company had earlier today released the prospectus to raise the $350, i.e., 50,000 shares at a price of $0.007 per share. This offer is extended to specific parties on invitation from the Directors. Hence, forms for applying to these shares will be issued by the Company to these parties. All the shares, which are being offered under this Prospectus will rank at par with shares on issue at the date of this Prospectus.
The main objective for coming out with this capital raising is to do away with the trading restrictions that are attached to the shares issued by the company prior to the closing date. The Company wants to raise only a nominal amount of $350 under this document and, hence, the objective of this Prospectus is not to raise money. Application for the Quotation of the Shares on the ASX shall be made by the company within a period of 7 days of the date of issuance of this Prospectus. However, if the ASX does not grant the official quotation post the issuance and before the expiration of 3 months of this prospectus, then the company will not issue any shares. In consonance with this, the company will refund all the application monies for the Shares within the prescribed time, without any interest.
The expenses of the Offer which would be approximately $10,544 are anticipated to be higher than the amount received under this Prospectus. The deficiency shall be met from the Company’s existing cash reserves.
Post this development the total shares on issue on completion of the Offer shall be 1,198,765,038. The Offer will have an immaterial impact on the Company’s financial position, being receipt of funds of $350 less costs of making the Offer of approximately $10,544.
Both the Company’s annual report for the year ended 31 December 2017 and the Company’s half-yearly report for the half year ended to 30 June 2018 included a brief on the deteriorating financial position of the Company and the existence of a material uncertainty about the Company’s ability to continue as a going concern.
Notwithstanding the ‘going concern’ paragraph included in the abovementioned reports, the Directors have a belief that the Company has sufficient funds to adequately meet the Company’s current commitments and short-term financing needs.
However, it is highly likely that further funding will be required to meet the medium to long-term working capital costs of the Company.
Meanwhile, the share price of the company has fallen by 89.19 percent in the past six months as on 13 December 2018. OGX’s shares traded at $0.007 with the market capitalization of circa $9.28 Million as on 3 January 2019 (AEST 2:57 PM).
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