De Grey Mining has secured a $125 million placement to deliver a pre-feasibility study for the Mallina gold project in Western Australia next year.
The placement comprises 113.6 million De Grey shares priced at $1.10 per share which was strongly supported by shareholders.
The Mallina pre-feasibility study is slated for completion in the second half of 2022.
De Grey stated the funding would also be used for extension drilling at Mallina’s Hemi and Regional deposits and resource definition drilling at the project’s Diucon and Eagle zones.
The share price under the placement represents a nine per cent discount from the last traded share price of $1.21 on October 19 2021.
De Grey released a scoping study for Mallina which outlined its potential to be a top five Australian gold mine.
The site is slated to have an annual average production of 473,000 ounces for the first five years and 427,000 ounces over 10 years.
It will have an average all-in sustaining cost of $1111 per ounce for the first five years and $1224 per ounce over 10 years.
“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 managing director Glenn Jardine said last week.
“De Grey will now have a significantly strengthened balance sheet which provides a strong platform to unlock further value at Mallina.”
The company will aim to establish tier one production potential from Mallina’s Hemi deposit and nearby zones.
The site’s total maiden mineral resource contains 192 million tonnes at 1.1. grams per tonne of gold at 6.8 million ounces.
This includes an indicated resource of 66 million tonnes at 1.3 grams per tonne of gold at 2.8 million ounces and an inferred resource of 127 million tonnes at 1 gram per tonne of gold at 4 million ounces.
“Hemi is an exceptional new Western Australian gold discovery which is redefining the gold potential of the Pilbara and has changed the future for De Grey and our shareholders,” De Grey technical director Andy Beckwith said in June.