Name of the Project
Mallina gold project.

Location
Pilbara region of Western Australia.

Project Owner/s
De Grey Mining.

Project Description
A scoping study has determined that the Mallina gold project presents a potentially commercially viable development opportunity with significant upside.

The project has total measured, indicated and inferred mineral resources of 229.8-million tonnes grading 1.2 g/t gold.

The scoping study assessed three alternative throughput rates for the processing plant – 7.5-million tonnes a year, ten-million tonnes a year and 12.5-million tonnes a year. A ten-million-tonne-a-year plant was selected.

The scoping study envisages average gold production of about 473 000 oz/y at an average feed grade of 1.6 g/t gold over the first five years and about 427 000 oz/y at an average feed grade of 1.4 g/t gold over the ten-year scoping study evaluation period.

The project is expected to produce 4.6-million ounces of gold over ten years.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 5% discount rate, of about $2.8-billion and internal rate of return of about 60%, with an unleveraged payback of about 1.5 years.

Capital Expenditure
Estimated capital cost for a ten-million-tonne-a year plant and site infrastructure is $835-million, inclusive of a 25% contingency.

Planned Start/End Date
Not stated.

Latest Developments
De Grey Mining will raise A$125-million in a fully underwritten share placement to fund exploration work and to complete a prefeasibility study on its Mallina gold project.

The company will place 113.6-million shares at A$1.10 each under its existing placement capacity.

The offer price represents a 9% discount to De Grey’s last closing price on October 19, and an 8% discount to the company’s 11-day volume weighted average share price.

The placement is fully underwritten by Canaccord Genuity and Argonaut PCF.

“The placement provides De Grey with a significant capital runway to undertake exploration activities to expand the existing resource and progress project development studies. De Grey will now have a significantly strengthened balance sheet, which provides a strong platform to unlock further value at Mallina,” De Grey MD Glenn Jardine has said.

Key Contracts, Suppliers and Consultants
Majesso Consulting (independent mining cost estimate, based on a contractor mining strategy) and GR Engineering (independent assessment of the processing cost estimate at a throughput rate of 7.5-million tonnes a year).

Contact Details for Project Information
De Grey Mining, tel +61 8 6117 9328 or email admin@degreymining.com.au.