PERTH (miningweekly.com) – Gold developer Dacian Gold has abandoned its plans for a A$102-million entitlement offer, citing a volatile gold market.
The miner previously launched a A$150-million capital raise consisting of a A$50-million institutional placement and a A$100-million accelerated nonrenounceable entitlement offer, on a 4-for-15 basis. The offer was amended shortly thereafter to a 3-for-10 entitlement offer, to raise A$102-million, and a A$46-million placement to institutional investors.
However, Dacian said on Monday that following a successful A$26-million interim placement to existing and new institutional and sophisticated investors, the company had taken the decision to avoid excessive dilution in the current volatile gold market.
Dacian told shareholders that as market conditions in the gold sector deteriorated over the course of the last week, the company and its key shareholders had determined that a smaller interim raising, in the form of a placement, was preferable to a larger raising.
Executive chairperson Rohan Williams said the decision to alter the original equity raising structure was in direct response to shareholders’ concern about the company undertaking an "overly dilutionary raising in a difficult capital market".
“We respect the feedback we received from our shareholders during the process and, therefore, determined to complete a smaller, interim raising. Dacian Gold will continue to focus on completing the debt component of the project finance as soon as possible, while at the same time resuming exploration and pursuing development activities at Mt Morgans.”
The interim placement, which consisted of 10.6-million shares at A$2.50 each, falls within the company’s issuing capacity, and will not require shareholder approval. The new funds will allow Dacian to maintain the current development and exploration momentum at the Mt Morgans project, in Western Australia.