De Grey Mining said it has received firm commitments for a $130 million placement, with a further $20 million to be raised via a share purchase plan.
The placement was priced at $1 per share, which represents an 8.3 per cent discount to De Grey’s closing share price of $1.09 on October 4.
De Grey said it received strong demand from both existing and new institutional investors, with the placement attracting Australian and international investors.
The company’s largest shareholder, Gold Road Resources, subscribed to its pro-rata interest as part of the placement and will maintain its 19.99 per cent stake following settlement.
De Grey shareholders are also invited to subscribe to up to $30,000 of new shares at $1 per share as part of a $20 million share purchase plan (SPP).
The SPP is not underwritten, and De Grey said there was no guarantee it would raise the targeted amount.
Proceeds from the placement and SPP will support the completion of the definitive feasibility study (DFS) for the Mallina gold project (targeted for mid-2023), with a subsequent final investment decision to be made.
The raising will also support further exploration at Mallina, with the hope to make new discoveries and grow the project’s resource, as well as other smaller processes including pre-development activities and general working capital.
De Grey released its Mallina pre-feasibility study (PFS) in September, adding an extra 2.1 million ounces (Moz) of potential gold production to the mine.
The PFS demonstrated the potential for 6.4Moz of gold to be produced across a 13.6-year mine life. A 2021 Mallina scoping study indicated a 4.3Moz production profile across the life of mine. This equates to an average annual gold production of 540,000oz across the first 10 years of the mine’s life.
Mallina includes the Hemi deposit and other regional deposits, with Hemi to be the flagship mine.