Romarco raises $138 million after big gold hits

Vancouver – Romarco Minerals (R-V) closed an over-subscribed financing shortly after announcing more bonanza-grade gold hits at its Haile project in South Carolina.

The company was raising money to further develop the rapidly expanding Haile project, located 8 km northeast of Kershaw in Lancaster County.

Through the bought-deal financing the company raised $120 million by selling 61 million shares at $1.97. Romarco later announced it raised a further $18 million after the financing was oversubscribed by 9 million shares.

The financing comes after Romarco pulled more high-grade intercepts from multiple zones on the project.

In the Horseshoe zone, which Romarco discovered only recently when testing the area for use as a tailings site, hole 4 hit 60.7 metres grading 11.9 grams gold per tonne starting at 450 metres in what the company called its “new best hole ever”. Assays for the lower portion of hole 4 are still pending. Collared 70 metres to the northeast, hole 3 cut 15 metres averaging 1.8 grams gold from 430 metres downhole.

The condemnation hole that inadvertently discovered the zone lies between the two new intercepts and produced a 62.5-metre intercept grading 9.6 grams gold. Another earlier hole, hole 1646 cut 4.6 metres grading 311.2 grams gold at 148 metres depth, including 1.5 metres grading an impressive 929.2 grams gold.

Romarco has added core extensions to the reverse circulation drills to better understand mineralization in the zone, which sits some 200 metres northeast of the rest of the known Haile system.

In South Pit, on the western portion of the property, Romarco is testing the zone’s westward expansion potential and is meeting with success. Hole 1749 hit 16.8 metres grading 11.3 grams gold starting at 184 metres. Hole 1747 intercepted 10.7 metres carrying 4.1 grams gold starting 120 metres.

At the Snake zone, east of South Pit, Romarco is searching for mineralization below the planned pit. Hole 1733 hit the target, intercepting 9.1 metres carrying 4.5 grams gold starting at 49 metres and then another 9.1 metres carrying 4.3 grams gold starting at 201 metres. Hole 1735 also hit deeper mineralization at Snake, cutting 19.9 metres averaging 9.8 grams gold starting at 238 metres.

The company has established that the South Pit, Snake and Ledbetter zones form part of a continuous gold trend, which it suspects spans at least 7 km in length and 1 km in width. The mineralized footprint at Haile remains open in all directions and at depth despite extensive exploration. The company expects to continue exploration in the area for several years.

A late 2009 resource estimate for Haile had 44.6 million measured and indicated tonnes grading 1.51 grams gold, with a further 61.2 million inferred tonnes grading 1.0 gram gold, all using a 0.34-gram-per-tonne cut-off. The resource includes 1.3 million oz. of gold in reserves from an early 2009 feasibility study, at a grade of 2.71 grams gold.

The company is still looking for a tailings site without mineralization as it drills the fifth possible site. The difficulty of finding a suitable area has pushed back the completion of the feasibility study from June 2010 until the end of the year.

The company also continues to work through its 130,000-metre drill program for 2010, completing both infill and step-out drilling.

Mineralization at Haile is found in moderately to steeply-dipping bodies within an east-northeast-trending zone. Gold mineralization is associated with pyrite and silification. The mineralization is typically restricted to the laminated metasiltstone, but occasionally spreads into the volcanic assemblage.

Romarco acquired the property in late 2007 from Kinross Gold (K-T, KGC-N). Kinross had bought the property in 1998, but did nothing with it other than close and reclaim the mine due to low gold prices and poor economic conditions. Since acquiring the property Romarco has moved aggressively to develop the project.

Romarco’s share price was up 9¢ on the latest drill results to close at $2.13, an all-time high for the company after a steady climb from 52¢ a year ago. The company has 388 million shares outstanding,