Bendigo Mining finds pot of gold to offset costs

Bendigo Mining finds pot of gold to offset costs

STRUGGLING Victorian gold revivalist Bendigo Mining completed a $50 million capital raising at one-third the price its shares were trading at six months ago.

Goldman Sachs JBWere and Macquarie Equity Capital Markets tried to place shares with institutions between 88¢ to 96¢, but the goldminer was forced to settle for a 12-month low price of 80¢ a share.

Bendigo shares had traded at 95.5¢ before a trading halt on Wednesday, but closed 10.5¢, or 11 per cent, lower at 85¢ yesterday.

The stock traded as high as $2.53 in May. But the company has released a string of disappointing announcements in the past few weeks, which forced it back to the market for funding.

The company slashed its reserves and delayed significant production and cash flow from its Kangaroo Flat mine. The new production guidance of 50,000 ounces for 2007 and 80,000 ounces for 2008 caused Citigroup to cut its earnings forecasts for both years by 38 per cent.

Although Bendigo had about $40 million in the bank in September, corporate development manager Tim Churcher said it was easier to raise money now than when the markets slowed down over summer.

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