Macro
De Grey Mining to raise A$600M for Hemi Gold Project, aiming for 530,000 oz annual output in Australia.
By Max Weldon
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De Grey Mining has announced a significant step in securing the future of its Hemi Gold Project by finalizing the equity component of the project's financing. This move is aimed at enhancing the planning and management of the capital works plan, which includes the near-term ordering of long-lead items and contractor appointments. The company plans to issue 545.5 million shares, raising a total of A$600 million through an institutional placement and a pro-rata accelerated non-renounceable entitlement offer. The placement's issue price is set at A$1.10, a 15% discount to the stock's closing price on May 7, which was A$1.27.
The equity raising is described by Managing Director Glenn Jardine as a "landmark milestone" and a "key de-risking event" for De Grey. This financial strategy has garnered significant support from key stakeholders, underscoring the high-quality nature of the Hemi project and De Grey's ambition to become a major Australian gold producer. The Hemi Gold Project, part of the larger Mallina Gold Project, is recognized for its potential as a tier-1 gold mine with an impressive mineral resource estimate of over 12.6 million ounces.
The Hemi Gold Project is designed for large-scale, low-cost open-pit mining, projecting an output of 530,000 ounces annually over the first decade of production. The project's ore has a refractory nature, necessitating complex processing techniques. De Grey has chosen pressure oxidation (POX) as the primary method for gold extraction, a technique used in approximately 40% of the world’s gold production. Project director Peter Holmes, who previously commissioned Barrick's Pueblo Viejo project, one of the largest POX plants worldwide, leads the project's development.
Company Statement from De Grey Mining:
"Proactively finalizing the equity component of the (Hemi) project financing allows better planning and management of the forward capital works plan, including near-term ordering of long-lead items and contractor appointments."
Glenn Jardine, Managing Director of De Grey Mining:
"The underwritten equity raising represents a landmark milestone and a key de-risking event for De Grey." "The significant level of support received from key stakeholders to date provides strong validation of the high-quality nature of Hemi and our strategy of becoming a material Australian gold producer."
Finance GPT
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