PERTH (minigweekly.com) – ASX-listed OreCorp will raise A$20.6-million through a share placement to institutional and sophisticated investors to fast-track the development of its Nyanzaga gold project, in Tanzania.

The company will place 43-million ordinary shares at an issue price of 48c each to investors in North America, Europe and Australia.

The shares will be placed under the company’s existing capacity.

“The funds will allow OreCorp to fast-track the definitive feasibility study (DFS) and potential development of Nyanzaga and to aggressively pursue exploration programmes at both Nyanzaga and the Akjoujt South project,” said OreCorp CEO and MD Matthew Yates.

“The company now has the funding in place to further compress the anticipated development schedule for the project, allowing OreCorp to achieve its strategic objective of becoming a gold producer in the near term, while delivering significant shareholder returns.”

Funds will be used to complete a DFS, as well as permitting and licensing during the second half of 2017, while also providing predevelopment approval capital for front-end engineering design and preconstruction site activities.

Follow-up drilling at both Nyanzaga and Akjoujt South will also be funded.

A recent prefeasibility study into the Nyanzaga project has estimated that it could deliver some 213 000 oz/y of gold over a 12-year mine life. A capital investment of $287-million will be required to develop the project, with concurrent openpit and underground mining to take place.

The openpit operation is expected to deliver some 1.75-million ounces of contained gold over the life of the project, which is 25% higher than estimated in the previously completed scoping study for the pit.

Underground mining, which would start in the first year of operation, is expected to produce some 1.16-million ounces of contained gold, with the underground operation to be developed to a depth of 800 m below surface, while the deposit remains open at depth.