PERTH (miningweekly.com) – Gold explorer De Grey Mining will raise A$100-million in a share placement to fund extension and definition drilling at the Hemi discovery, in the Pilbara.
The ASX-listed company has announced plans to issue 83.4-million shares in a two-tranche placement, priced at A$1.20 a share, with the issue price representing a 16.4% discount to the company’s last trading price.
The first tranche of the placement will be conducted under the company’s existing capacity, while the second tranche placement will be subject to shareholder approval.
The second tranche placement will see major shareholder DGO Gold investing a further A$12-million in the company, to take its share in De Grey to 15.8%, while nonexecutive director Peter Hood has also committed to invest a further A$360 000.
An extraordinary general meeting is expected to take place in late October to allow shareholders to vote on the DGO investment, as well as further investment from Hood.
De Grey told shareholders on Monday that the capital raised would allow for extension and definition drilling at the Hemi discovery to continue well into 2021.
“The Hemi discovery in the Mallina basin is rapidly moving towards our goal of defining a tier 1 project with true district-scale potential. Mineralisation in the Hemi area has been identified over an area spanning 2 500 m north-south and 2 000 m east-west, with depths of more than 400 m in areas tested,” said De Grey MD Glenn Jardine.
“This significant capital raising puts De Grey in a position of financial strength to turn this potential into greater value for all our shareholders. The support of most of our long-term shareholders together with some new shareholders, allows the company to maintain its substantial drilling programme while accelerating exploration in some areas.”
Jardine said De Grey intended to maintain a minimum of six drill rigs in operation well into the second half of 2021, which would continue to generate results and growth in its gold inventory.
“We already have 2.2-million ounces of mineral resources from our shear-hosted deposits and expect to add substantially to this through the delivery of a maiden mineral resource estimate for the Hemi discovery by mid-2021.”