Shares of cash strapped Dynasty Metals & Mining (TSX: DMM; OTCQX: DMMIF) rose more than 50% after the company announced a US$4 million private placement with three directors of Goldgroup Mining (TSX:GGA; OTC:GGAZF).
Dynasty signed a binding letter of intent with Javier Reyes, Gregg Sedun, and Keith Piggott, who is also Goldgroup’s chairman, president and CEO. The directors have agreed to use their own money to buy Dynasty shares for 15¢ apiece for gross proceeds of US$4 million. The news pushed Dynasty up nearly 58%, or 9.5¢, to close Aug. 16 at 26¢ per share.
Dynasty intends to use the proceeds to settle some of the payments that it owes the Ecuadorian government, creditors and employees as well as for working capital.
At the end of the first quarter, the miner had US$200,000 in cash resources and a working capital deficit of US$13.4 million. That deficit has likely grown since.
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