PERTH (miningweekly.com) – Junior De Grey Mining will raise A$31.2-million through a share placement to fund its ongoing exploration work at its Mallina gold project, in Western Australia.

The company on Tuesday reported that it had received firm commitments for the placement of more than 111.4-million shares, at a price of 28c each, to sophisticated and professional investor clients of Bell Porter Securities and Argonaut Securities.

The placement price represented a 12.5% discount to De Grey’s last closing price, and a 9.6% discount to the company’s ten-day volume weighted average share price.

Under the placement, shareholder DGO Gold has continued to maintain its 16.35% interest in the company by subscribing for some A$5.1-million in the share placement, subject to De Grey shareholder approval, with company director Peter Hood also seeking approval for the issue of A$280 000 worth of stocks.

The shares being placed under the capital raise will be done so under the company’s existing placement capacity.

De Grey told shareholders that funds raised will be used to continue exploration at Mallina, with the priority of work associated with determining the scale of the Hemi deposit, as well as for ongoing administration and corporate costs.

“Since announcing the Hemi discovery on February 6 this year, the company has been flooded with offers to assist in a capital raise or direct investment. We recognised the opportunity to secure further funding and to build a strong register to assist with funding requirements into the future through the introduction of global blue chip gold only and resource funds,” said De Grey executive chairperson Simon Lill.

“We chose to proceed with the capital raising once we were comfortable with the level of interest and are now extremely pleased to advise that many of the world’s top funds in this sector have joined our register.

“It is an extremely strong validation as to the quality of De Grey’s Hemi discovery and the Mallina gold project,” Lill added.