Gascoyne Resources had a tough December quarter, halting operations at its Dalgaranga gold mine and suspending its shares from the ASX, but the company is charting its way back.
Gascoyne has announced a $50 million funding package incorporating a $26.3 million equity raise, a $21.3 million investment from Tembo Capital and a $2.5 million loan from Delphi.
The $26.3 equity raise involves a $8.6 million placement to sophisticated investors at an issue price of $0.10 per share, and a $17.6 million 1-for-2.42 entitlement offer at the same price as the placement.
The offer price of $0.10 represents a 49 per cent discount to Gascoyne’s closing share price of $0.195 on November 4, 2022 (its last trading day on the ASX).
Tembo Capital’s $21.3 million investment comprises two tranches: a $15 million secured loan that will convert to Gascoyne shares at $0.10 per share, and a $6.3 million secured loan that will convert to a gold royalty.
To accompany its $2.5 million secured loan, Delphi has committed to invest up to $5.8 million in the equity raise.
Gascoyne managing director and chief executive officer Simon Lawson said the $50 million funding package would set the company up for success.
“This multi-pronged $50 million funding package – which is underpinned by the highly respected global resources private equity fund Tembo Capital and our supportive major shareholder, Delphi – will put Gascoyne in a unique position in the Australian gold sector,” he said.
“It follows the operational reset which we successfully implemented at the Dalgaranga gold mine last year and will give us the balance sheet capability to unlock the value of our key assets – the exciting high-grade Never Never gold deposit and our high-quality infrastructure at Dalgaranga.”
Gascoyne will use more than $27 million of the funding proceeds to support exploration and studies, including the development of the Never Never deposit.
After placing Dalgaranga on care and maintenance, Gascoyne has instituted an operational reset, with the Never Never deposit – located immediately adjacent to the Dalgaranga mill – at the heart of an updated operating plan.
The operating plan – which has an 18-month timeline and would see Gascoyne make a decision to restart Dalgaranga in the second half of 2024 – will aim to delineate a Never Never reserve of more than 300,000 ounces at a grade exceeding 4 grams per tonne (g/t) gold and a Never Never resource of more than 600,000 ounces exceeding 5g/t gold.
This would culminate in the development of a five-year mine plan to deliver 130,000–150,000 ounces of gold per annum.
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