ASX All Ords gold stock Ausgold Ltd (ASX: AUC) is taking a beating today.
Ausgold shares closed up 8.0% on Friday at 88 cents apiece. The stock then entered a trading halt on Monday, pending an announcement regarding a capital raising.
Following the release of that announcement this morning, Ausgold shares tumbled to 79 cents apiece, down 10.2%. After some likely bargain hunting, in later morning trade shares are changing hands for 81 cents each, down 8.0%.
For some context, the All Ordinaries Index (ASX: XAO) is up 0.1% at this same time.
Longer-term, shares in the ASX All Ords gold stock remain up 92.9% year-to-date, racing ahead of the 3.3% gains posted by the benchmark index over this period.
Here's what's got investors favouring their sell buttons today.
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ASX All Ords gold stock raising $80 million
Ausgold shares are under pressure today after the company announced a fully underwritten two-tranche placement of 100 million new shares.
The shares will be issued for 80 cents each, or 9.1% below Friday's closing price, which is why we're seeing the ASX All Ords gold stock slide today.
The miner said it will use the $80 million in proceeds from the capital raising to accelerate its Katanning Gold Project (KGP), located in Western Australia, towards a final investment decision.
The funds will be deployed to build a workforce accommodation facility, for land acquisition payments, and for further exploration and general working capital.
Ausgold said it is also undertaking a Share Purchase Plan (SPP) at the same issue price of 80 cents a share for eligible stockholders to raise up to an additional $10 million.
The miner noted that the SPP will enable eligible shareholders to increase their holding in the ASX All Ords gold stock by up to the maximum allowed value of $30,000, without incurring any brokerage or transaction costs.
What did Ausgold management say?
Commenting on the ASX All Ords gold stock's capital raising, Ausgold executive chairman John Dorward said, "The successful completion in June of the Katanning Gold Project Definitive Feasibility Study and the recent freehold land acquisitions are major milestones on the road to Ausgold becoming Australia's next mid-tier gold producer."
Dorward added:
This new capital stands us in good stead to further accelerate works at the KGP ahead of a final investment decision while we continue to explore our extensive tenement holding.
With 44,000 metres of drilling underway, we look forward to updating shareholders on the results of that program which will target down-plunge extensions of some of the highest potential areas of the KGP orebody.
