PERTH (miningweekly.com) – Gold developer Millennium Minerals is hoping to raise A$15-million through a fully-underwritten rights issue to fast-track the development of its Nullagine project, in Western Australia.

The 1-for-8.8 renounceable rights issue will be priced at 16.5c a share, with more than 90.6-million shares to be issued. The issue price represented a 17.5% discount to Millennium’s closing price on February 20.

A$10-million of the capital raised will go towards the development of a new high-grade underground mine at the Golden Gate mining center, with a further A$4-million going to accelerate exploration of high-grade gold targets, with the balance of the funding going towards working capital expenditure.

Millennium CEO Peter Cash said on Monday that the proceeds would give the company additional capability to fast-track exploration and growth programmes aimed at increasing production and head grades at Nullagine, and at reducing operating costs.

“We are now on the cusp of another important transition at Nullagine, where we have the opportunity to mine and process much higher-grade ore sources with the potential to further significantly increase our average head grade and reduce operating costs, all against the backdrop of a very favourable Australian dollar gold price environment.”

Cash said that the funding would also allow Millennium to bring forward the development of its second underground mine at Golden Gate, which hosts some of the highest-grade deposits identified at Nullagine to date.

“With the acceleration of the Golden Gate underground development, we expect to increase our production guidance from 90 000 oz to 100 000 oz, at an all-in cost of between A$1 300/oz and A$1 375/oz in 2019, to between 110 000 oz and 120 000 oz, and an all-in cost of A$1 200/oz in 2020.”

Cash noted that the exploration programme was aimed at increasing the reserve base from the current 375 300 oz to more than 500 000 oz by the end of the year, to deliver on the targeted mine-life of more than five years.