De Grey Mining’s $100m raising to supercharge Pilbara gold drilling
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Special Report: Investors have demonstrated their faith in De Grey’s gold assets through their support for a $100m capital raising to fund drilling at Hemi and in the broader region.
Notably, De Grey Mining’s (ASX:DEG) placement of about 83.4 million shares priced at $1.20 each, or a 1 per cent premium to the 10-day volume-weighted average price, was more than three times overbid and saw further participation by major shareholders such as DGO Gold (ASX:DGO) and global institutional participation.
DGO’s $12m investment and non-executive director Peter Hood’s commitment to invest $360,000 are subject to shareholder approval.
Proceeds will be used to fund ongoing extension and definition drilling of the Hemi discovery, testing of mineralised intrusions close to Hemi, regional exploration of intrusion and shear-hosted targets, enhanced site infrastructure and early stage project de-risking studies.
Managing director Glenn Jardine says the Hemi discovery in the Mallina Basin in WA’s Pilbara region is advancing the company’s goal of defining a tier 1 project with true district-scale potential.Hemi mineralisation has already been identified over an area spanning +2,500m north to south, +2,000m east to west and to depths of +400m.
“This significant capital raising puts De Grey in a position of financial strength to turn this potential into greater value for all of our shareholders,” Jardine said.
“The support of most of our long-term shareholders together with some new shareholders, allows the company to maintain its substantial drilling program whilst accelerating exploration in some areas.
“Our intention is to maintain a minimum six drill rigs in operation well into the second half of 2021 which will continue to generate results and growth in our gold inventory.”
De Grey plans to allocate more drilling resources in the coming months to test the district-scale opportunities within the broader Mallina gold project.
This includes exploration and definition of known mineralised intrusions close to Hemi such as Scooby, Shaggy and Antwerp along with the exploration and initial drill testing of regional intrusion targets.
Funds will be also used for further target generation work including geochemical and geophysical surveys; exploration and extension drilling of the deposits that make up the existing 2.2-million-ounce resource outside Hemi; further early stage project de-risking studies; and improvements to site infrastructure.
De Grey recently discovered the 1.8km-long and up to 80m thick Falcon intrusion during aircore drilling, which returned hits including 21m at 3.4 grams per tonne for gold from 40m, and 19m at 2.1 g/t gold from 68m.
This intrusion is west and south of the Brolga and Aquila prospect and remains open to the south and at depth.
The discovery highlights the potential to extend Hemi and to identify similar, near-surface Hemi-like intrusions in the Greater Hemi area.
This article was developed in collaboration with De Grey Mining, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.