Photo by: Bloomberg
PERTH (miningweekly.com) – ASX-listed Gold Road Resources on Wednesday announced plans to raise A$74-million through a share placement and accelerated entitlement offer to fund the development of its Gruyere project, in Western Australia.
The company would place an initial 98-million shares, priced at 44c each, to sophisticated and institutional investors to raise some A$43-million.
A one-for-ten pro-rata accelerated non-renounceable entitlement offer, also priced at 44c a share, would raise the balance of the funds.
Gold Road pointed out that the issue price was a 4.3% discount to the company’s last closing price and a 10.7% discount to the five day volume weighted average price of Gold Road shares.
“This equity raising follows the release of the detailed prefeasibility study confirming the Gruyere project as one of Australia’s best undeveloped gold deposits, with a long life and low costs,” said Gold Road executive chairperson Ian Murray.
He noted that the decision to raise additional equity now was a strong signal of Gold Road’s commitment to developing the Gruyere project, and highlighted significant investor interest in supporting the company on this journey.
“This equity raising will enable Gold Road to de-risk and de-bottleneck the Gruyere project, and to expedite its development, through the purchase of long-lead time capital items and the start of early works and front-end engineering and design, in parallel with the completion of the feasibility study and a continued focus on exploiting priority exploration targets across the Yamarna Greenstone belt.”
The Gruyere project was expected to deliver some 265 000 oz of gold over a mine life of 12 years, and would require a capital investment of around A$455-million.
The project development was based on a single large openpit mine and a conventional carbon-in-leach plant with a throughput of between 7.5-million tonnes and 8.8-million tonnes a year.
A feasibility study into the project was slated for completion in late 2016, and construction was expected to start in 2017, with first gold pour targeted in late 2018.