De Grey raises $125m for Mallina PFS, further gold drilling
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Investors have demonstrated their confidence in De Grey and its giant Mallina gold project in WA’s Pilbara region by committing to a $125m placement.
The placement of 113.6 million shares priced at $1.10 per share, which represents a 8% discount to the 11-day volume weighted average price since the release of its scoping study earlier this month, drew high levels of participation from existing and new domestic and foreign institutional investors.
De Grey Mining (ASX:DEG) notes that proceeds from the placement will be used to fund the commencement and completion of the pre-feasibility study for the Mallina project, which is due for release in the second half of 2022.
Funds will also be used for resource extension drilling at the Hemi and regional deposits, resource definition drilling – particularly at the exciting Diucon and Eagle zones, exploration activities targeting new large-scale discoveries across its 150km tenement package, and operations support and pre-development capital expenditure items.
The Mallina project, which includes the sensational 6.8 million oz Hemi intrusive deposit, has all the hallmarks of becoming one of Australia’s largest gold developments since AngloGold’s Tropicana almost a decade ago.
De Grey’s scoping study had found that the project, which has a broader resource of 9Moz, could produce gold at a very meaty 473,000oz per year during the first five years of operation and a still significant 427,000oz over its initial 10 year mine life.
Development of the mine and processing plant is expected to cost $893m while all-in sustaining costs are estimated to be about $1,111 per oz over the first five years and $1,224/oz over its life.
This is of course very early stage with the company already identifying clear opportunities for further resources growth highlighted by the plans to maintain the exploration drilling programs at and around Hemi and regionally across their large tenement package!
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.