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De Grey Mining (ASX:DEG) - Managing Director, Glenn Jardine
Managing Director, Glenn Jardine
Source: De Grey Mining
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  • De Grey Mining (DEG) is looking to raise $125 million in an institutional placement to bolster work at its Mallina Gold Project in Western Australia
  • The company intends to issue 113.6 million shares at $1.10 each, which represents a nine per cent discount to yesterday’s closing price
  • The proceeds will be used to complete a prefeasibility study for the project and support various exploration and drilling activities across the whole tenement package
  • It follows the release of a scoping study earlier this month, which predicted the project to be “a future top 5 Australian Gold Mine”
  • Shares in De Grey Mining were placed in a trading halt this morning, which will be lifted no later than Friday, October 22

De Grey Mining (DEG) is looking to raise up to $125 million in a fully underwritten institutional placement, which will be used to finalise or progress a number of activities at its Mallina Gold Project in Western Australia’s Pilbara region.

The gold-focused explorer and project developer intends to issue 113.6 million shares at $1.10 each, which represents a nine per cent discount to De Grey’s closing price of $1.21 per share yesterday.

Canaccord Genuity has been appointed as global coordinator, joint lead manager, joint underwriter and joint book runner. Argonaut Securities will act as joint lead manager and joint bookrunner, while Argonaut PCF is joint underwriter. Azure Capital has also been appointed as corporate adviser to the placement.

Notably, De Grey has elected to not proceed with a share purchase plan, since all existing shareholders “have had the opportunity to acquire shares at reasonable prices over the last 30 days,” the company said.

Managing Director Glenn Jardine said the placement showed a high level of investor support for both De Grey’s growth strategy and the “globally significant” Mallina Gold Project.

“The placement provides De Grey with a significant capital runway to undertake exploration activities to expand the existing resource, and progress project development studies,” he said.

“De Grey will now have a significantly strengthened balance sheet which provides a strong platform to unlock further value at Mallina.”

The funds will be used to complete a prefeasibility study for the project — scheduled for release in the second half of next year — along with resource extension drilling at Hemi and its surrounding deposits, and definition drilling at the Diucon and Eagle zones.

Other exploration drilling work will be carried out across additional areas of the tenement package, while some of the funds will go to operational support and pre-development capital expenses.

The financing follows the release of a scoping study earlier this month, which projected the Mallina Gold Project to be “a future top 5 Australian Gold Mine.” It also forecast annual production of 473,000 ounces over the first five years at an average all-in sustaining cost (AISC) of $1111 per ounce. Over a 10-year period, annual production is estimated to be 427,000 ounces at an AISC of $1224 per ounce.

Shares in De Grey Mining were placed in a trading halt this morning, which will be lifted no later than Friday, October 22.

DEG by the numbers
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