Emerald Resources (ASX:EMR) takes on massive $75M placement and 10-for-one reverse split

Funds from the large placement will be used to develop the company's Okvau Project in Cambodia while continuing some other exploration programs in the country.

More specifically, the cash will allow Emerald to continue developing the project while it finalises a US$60 million ($87 million) finance facility with Sprott Private Resource Lending over Okvau.

Managing Director Morgan Hart said the company is "delighted" with shareholder response to this capital raise.

"We have strengthened our register with globally recognised institutional shareholders with demand to participate in the placement well in excess of the shares available," Morgan said.

"The support demonstrates the robust nature of the Okvau Gold Project and the support for

the company’s strategy of becoming the first modern large-scale Cambodian gold producer," he said.

A general meeting will be held in March where Emerald will seek shareholder approval for the second tranche of the placement.

However, the placement will not be the only topic on the March meeting's agenda. With so many new shares going out and diluting Emerald stock, management said it will ask shareholders to approve a 10-for-one consolidation of existing shares.

This means, essentially, shareholders will have their total shares held divided by 10. For example, if an investor held 100,000 EMR shares prior to the consolidation, once consolidated they will only hold 10,000 shares. Generally, the company's share price will rise by the consolidation amount, meaning shareholders will theoretically not lose out and the company's market cap will stay the same.

The consolidation, then, acts as a restructuring of the company's capital.

On the back of today's news, Emerald shares have dipped a slight 2.27 per cent. Still above the share placement price, shares are currently selling off for 4.3 cents each in a $131.08 million market cap.