Canadian gold producer Kirkland Lake Gold has joined the register of De Grey Mining, investing $5 million in the Pilbara-focused gold play.
The news saw De Grey’s shares skyrocket as much as 67 per cent to a 52-week high of 25c yesterday before cooling to 23c — still up 50 per cent for the day.
Kirkland Lake will subscribe for up to 33 million shares in De Grey (ASX:DEG) at 15c per share, its last trading price prior to entering a trading halt last Thursday.
The investment represents a game-changer for the company, De Grey chairman Simon Lill said.
De Grey has now raised $8 million, after raising $3 million in August, and is now fully funded for exploration programs through to the end of 2018.
Last week, De Grey announced it had found 91 gold nuggets at a new gold target called Loudens Patch located at the base of the Mt Roe Basalt at its Pilbara project. Click here for Stockhead’s coverage.
De Grey is Kirkland Lakes’ second investment in the Pilbara after recently investing $58 million in Canadian-listed gold explorer Novo Resources.
Novo, along with ASX-listed joint venture partner Artemis Resources, started the ball rolling in the Pilbara with a significant gold nugget find at its Purdy’s Reward project located south of Karratha in Western Australia.
Kirkland Lakes has a market cap of US$2.7 billion and forecast 2017 production of 570,000 – 590,000 ounces of gold.
De Grey also recently reported a 20 per cent increase in gold resources at the Pilbara gold project to over 1.2 million ounces.
The company has a market cap of around $60 million.