Alkane raises $10.6m from Gandel

Alkane Resources Ltd non-executive director Ian Gandel has invested $10.6 million buying extra shares in the company, after he was required to take up a big shortfall in its $12.8 million rights issue.

Mr Gandel's company, Abbotsleigh Ltd, spent $2.4 million taking up its rights under the capital raising, pitched at 32 cents per share.

He spent a further $8.2 million underwriting the shortfall, under Alkane's one-for-five non-renounceable share entitlement offer launched in November, 2007.

Abbotsleigh acquired just over 33 million shares, and now holds approximately 70.4 million shares, representing a 29 per cent stake in the Perth-based company.

His stake is worth about $26 million on today's closing price of 37 cents.

Alkane had aimed to raise $12.8 million by issuing approximately 40.2 million shares in the company to existing shareholders, with the proceeds of the offer to be primarily used for two feasibility studies at Alkane's Tomingley Gold and Dubbo Zirconia projects.

The offer was fully underwritten by Mr Gandel's other company, Gandel Metals Pty Ltd.