Etruscan: Stock Down on New Equity Offering

Etruscan Resources Inc. (ETRUF.PK) was down about 10% Tuesday after annoucing details of a new equity offering.  The company has agreed to sell 8,620,000 million units at a price of $1.45 per unit to raise gross proceeds of approximately $12.5-million.

Each unit will consist of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share of the company for a period of three years following the closing date of the offering at an exercise price of C$1.85 per common share.

The company has also granted the underwriters led by CIBC World Markets, an over-allotment option to purchase up to 15% of the total number of units sold in the offering, at any time up to 30 days from the closing.

Etruscan said the money raised from the offering will be used will be used to provide working capital for the Youga gold project, to fund exploration on its properties in West Africa and Namibia and for general corporate purposes. Youga, located in Burkina Faso, West Africa achieved commercial production earlier this month. 

Shares in Etruscan were down as much as C$0.18 in Tuesday morning trading to a 52-week low of a C$1.40.  The stock has been beaten up this year falling from a high of C$3.48 last July.