Gascoyne Resources has launched a capital raise to support the next phase of development of the Dalgaranga gold mine in Western Australia.
Taking place at $0.30 per share, the initiative will aim to raise up to $19 million through a $15-million share placement and a $4-million share purchase plan (SPP).
Gascoyne will use the proceeds to repay the remaining $10 million of its $20-million convertible note debt facility with major shareholder Deutsche Balaton AG, meaning Gascoyne will be debt free for the first time since Dalgaranga production began in 2018.
Remaining proceeds will go towards various objectives regarding near-mine exploration and growth at Dalgaranga. The Gilbey’s North prospect will remain a priority, as will Archie Rose, Plymouth and Lindville.
“Over the last three months we have been working on a multi-faceted strategy to increase mine life and ore feed grades at the Dalgaranga gold mine and reposition Gascoyne as an investable mid-tier gold producer with a clear growth strategy,” Gascoyne managing director and chief executive officer Simon Lawson said.
“This up-to-$19-million capital raise is underpinned by our existing major supportive shareholders along with significant support provided by new institutional investors located domestically and offshore.
“The $4-million SPP also enables all retail shareholders resident in Australia and New Zealand to participate in the equity raise on the same terms.”
Gascoyne expects to achieve record gold production in the March quarter of 2022, with a two-pronged strategy to balance ongoing production with a near-mine exploration campaign targeting a mine life of 3-5 years.
“We have made a significant shallow high-grade discovery less than 1km from our processing plant which is still growing and has the potential to substantially add to the life-of-mine,” Lawson said.
“We are working on significant updates to our existing mineral resource estimates, specifically at Plymouth and Gilbey’s, which have the potential to immediately add to the mining schedule and the life-of-mine.”
Lawson said Gascoyne is also looking to deliver new mineral resource estimates at the Gilbey’s North and Archie Rose prospects.
The issue price of $0.30 per share represents a 15.5 per cent discount to Gascoyne’s closing price of $0.355 per share on March 23.