PERTH (miningweekly.com) – Junior gold miner Dacian Gold will raise A$37-million through an institutional placement to accelerate exploration programmes at its Mt Morgans project, in Western Australia.
Some 13.7-million shares will be offered at a price of A$2.70 each, with the ability to take oversubscriptions to raise an additional A$3-million.
Dacian on Wednesday said that A$25-million of the funds raised would go towards an aggressive exploration programme at Mt Morgans, including on near-mine targets at Westralia, new mine targets at Cameron Well, and on new syenite-hosted targets.
A further A$12-million would go towards extinguishing a royalty obligation at the Jupiter mine, eliminating life-of-mine cost from openpit production.
“This equity raising provides shareholders the opportunity to capitalise on the recent significant advances made on the exploration front at Mt Morgans. We have substantially improved the exploration optionality at Mt Morgans with a new interpretation of the high-grade zones at Westralia trending into areas of banded iron formation never previously drill tested, and the new drill results at Cameron Well, which include 97 m at 3.1 g/t gold speak for themselves,” said Dacian executive chairperson and CEO Rohan Williams.
“Our intent with this equity raising is to fast-track the value realisation of this enhanced exploration optionality by bringing forward discovery of new mineral resources and potentially new mines and higher production levels.”
In addition to the share placement, Dacian will also undertake a share purchase plan, allowing eligible shareholders to subscribe for up to A$15 000 of new shares, at A$2.70 a share, to raise up to A$5-million.
The Mt Morgans operation produced 34 155 oz in the June quarter, which was well within its guidance of between 30 000 oz and 40 000 oz. The project is expected to achieve commercial production in the December quarter, and will deliver between 180 000 oz and 210 000 oz in the 2019 financial year.