De Grey Mining
(ASX:DEG) is looking for $150 million in a new round of fund raising to further the development of its rich Mallina gold project in WA which will become the 5th largest gold mine in the country when completed.
The latest funding comes a year after the company raised $125 million in October, 2021.
The latest raising will be done at $1 a share, according to market reports, just shy of the $1.10 a share the 2021 raising was done at.
The $1 a share is a thin 8.3% discount to the last traded price of $1.09 and only a 3% discount to 5-day volume weighted average price.
The capital raising is being divided between a fully underwritten institutional placement to raise $130 million and a non-underwritten share purchase plan (SPP) aiming to raise $20 million from retail investors.
The announcement made no mention that 19.99% shareholder, Gold Road would put its hand up to contribute around more $25 million to maintain its stake in De Grey.
De Grey revealed in September plans for a $1 billion plus mine to access the Mallina complex starting with the major deposit called Hemi.
Mallina has more than 10.6 million ounces of reserves at varying levels with 8.5 million ounces in the Hemi deposit alone. The deposits at Mallina span 150 kilometres going east to west.
Based on that the project had a maiden ore reserve of 5.1 million ounces at 1.5 grams to the tonne of gold.
The proposed mine is expected to produce 540,000 ounces a year in its first decade of life, 550,000 ounces a year in its first five years and peak production of 637,000oz in its fifth year of operation.
De Grey says the money to be raised will be used make sure it has enough money to complete its Definitive Feasibility Study in respect of Hemi (currently scheduled for Q2 2023) and take the company through to a final investment decision.
“Furthermore, the equity raising funds will provide De Grey with significant balance sheet strength and flexibility during the company’s project financing phase,” the company said on Wednesday.
De Grey had $64 million in cash on its balance sheet at June 30 so by the end of the raising in early November it should have around $200 million in the kitty.
