PERTH (miningweekly.com) – Gold miner Gascoyne Resources this week revealed plans to raise nearly A$28-million through share placements and entitlement offers to strengthen its balance sheet, with the miner planning to sell its shares at half price.

The company is hoping to raise an initial A$3.86-million through the placement of some 77.3-million shares, at a price of 5c a share.

A further A$20.6-million will be raised through a proposed four-for-five pro-rata non-renounceable entitlement offer, which will also be priced at 5c a share, subject to the finalisation of an underwriting agreement.

Gascoyne said this week that the company could also separately raise A$3-million through the placement of a separate batch of shares, on the conclusion of the initial placement and entitlement offer, at the same issue price.

The issue price of 5c a share represented a 50% discount to Gascoyne’s last closing price on March 15, and its five-day volume-weighted average price of 10c a share.

Gascoyne in January appointed Macquarie Capital as financial adviser, amid speculation that the company was fending off takeover offers. However, the company noted that despite remaining in discussion with a number of parties, no proposal has been received that could be considered in the best interest of shareholders.

The company told shareholders that the proposed equity raising provided stakeholders with the most certainty and potential value upside, but noted that it remained open to further discussions, and would review any proposals that came forward.

Gascoyne this week downwardly revised its production expectations for the half-year, from between 40 000 oz and 45 000 oz, to between 29 000 oz and 34 000 oz, as its Dalgaranga mine, in Western Australia struggled during the March quarter.

The company noted that operating performance in both January and February were impacted by poor reconciliation to geological models, with drill and blast and ore mining constraints also resulting in a significant reduction in the proportion of free-dig material.

February production was also impacted by a decision to build up run-of-mine stocks of the Gilbeys high-grade ore to allow a batch treatment campaign to further reconciliation understanding.

All-in sustaining costs for the first half of the year have also been increased from the previous estimate of between A$1 320/oz and A$1 420/oz, to between A$1 550/oz and A$1 875/oz.