Egan Street Resources is expected to emerge from a trading halt tomorrow morning to announce a $4 million placement to fund further drilling at its flagship Rothsay gold project in the State’s Mid West.

The explorer will place 16.1 million new shares to sophisticated and institutional investors in a single tranche at a price of 25¢, representing a 10 per cent discount to its last traded price of 27.5¢.

The historic Rothsay mine and surrounding landholding hosts a known resource of 701,000t at 11.6g/t for 262,000oz.

Egan Street hopes diamond and reverse-circulation drilling at the project’s Woodley and Woodley East Sheer can boost the resource to 400,000oz.

A pre-feasibility study in May put a $34 million price tag on developing Rothsay and gave it a net present value of $58.1 million using an 8 per cent discounted rate for an estimated capital payback period of 23 months.

The operation would have an initial 51/2-year minelife.

Egan Street hopes to complete a definitive feasibility study, raise finance, begin construction and pour its first gold by the end of next calendar year.

The Marc Ducler-led company had $2.77 million in cash before the raising.

Rothsay was last mined by Metana Minerals, which ceased production in May 1991 when the gold price fell below $US360/oz.