More cash in the bank. Pic: Getty Images
De Grey set to expand exploration after closing $31.2m placement
Mining
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Special Report: De Grey is raising $31.2m through a heavily oversubscribed share placement to fund ongoing exploration of its Hemi gold discovery in the Pilbara.
Strong investor interest has allowed the company to secure commitments for the placement of 111.43 million shares at 28c each from clients of joint lead managers Bell Potter Securities and Argonaut Securities, which include many of the world’s top funds.
Highlighting this interest, De Grey Mining (ASX:DEG) says the pricing represents a 10 per cent premium to the 30 day volume-weighted average price of its shares.
Major shareholder DGO Gold (ASX:DGO) has also committed to maintain its 16.35 per cent interest in the company through the further contribution of about $5.1m, which is subject to shareholder approval via an extraordinary general meeting.
Shares in De Grey rose more than 9 per cent on the news to 35c.
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Besides furthering work on Hemi, proceeds from the placement will also be used for exploration on associated targets along the Scooby to Antwerp Trend as well as certain early stage development initiatives.
Executive chairman Simon Lill says the company recognised that the flood of offers to assist in a capital raising or direct investment since making the Hemi discovery was an opportunity to secure further funding to meet its requirements.
“This is an extremely strong validation as to the quality of De Grey’s Hemi discovery and the Mallina gold project,” Lill added.
“The recent Hemi discovery also highlights the outstanding exploration potential De Grey has across our tenements, with the market now giving recognition to our existing 2.2 million ounces of resources.”
De Grey currently has two diamond rigs and one reverse circulation rig operating at Hemi.
The new funds will allow resource drilling to continue at Hemi and to also restart regional drilling programs on the other four intrusion targets at Scooby, Antwerp, Alectroenas and Shaggy.
Hemi was discovered in mid-December 2019 under a shallow ‘blanket’ of transported cover.
Subsequent drilling has provided compelling support for the company’s theory that the still underexplored 2.2-million-ounce Mallina project – itself a recent upgrade – hosts numerous large deposits.
Earlier this month, drilling extended Brolga gold mineralisation down dip while extending sulphide mineralisation a further 80m to more than 640m long.
It also confirmed gold mineralisation at the Aquila zone with top results of 16.2m at 3.3 grams per tonne (g/t) gold from 249.3m, 6m at 2g/t gold from 344.8m and 6m at 2.4g/t gold from 80m.
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