Canada's Kirkland Lake Gold, which is a major backer of TSX-listed Novo Resources Corporation - the company at the centre of a mini gold rush in the Pilbara - has thrown its weight behind Perth-based explorer De Grey Mining, which is one of several local explorers active in the same area.
Kirkland has agreed to a $5 million investment in De Grey as it progresses development of its Pilbara gold project.
Kirkland Lake’s investment in De Grey will be made through the subscription of 33.3 million shares in De Grey at 15 cents a share.
Kirkland Lake is also a heavy investor in TSX-listed Novo Resources Corporation, which last week backed a $10 million equity raising by Perth-based gold explorer Calidus Resources.
Calidus is developing its Warrawoona gold project in the Pilbara.
On the back of Calidus’ raising last week, several other gold explorers with operations in the same area experienced share price surges.
That included Venturex Resources, Impact Minerals, Kairos Minerals and Chalice Gold Mines, with the latter’s share price boosting to 24 cents a share; a high not reached by the gold hopeful since 2012.
Chalice’s share price spike came after it announced the start of a drilling campaign at its West Pilbara gold project, which it operates as part of a joint venture with Red Hill Iron.
Commenting on the Kirkland Lake investment, De Grey chairman Simon Lill said the company was now funded for its exploration programs through to the end of next year.
“Kirkland Lake’s interest is in the potential of the conglomerate gold within De Grey’s project area located near Port Hedland in the Pilbara region,” he said.
“We welcome this investment and look forward to added assistance in technical, financing, construction, commissioning and operational skills to complement our already strong geological team.”
The Kirkland Lake investment came as De Grey announced that settlement of its acquisition of the Indee gold project near Port Hedland, which was announced in February, had been extended by the vendor, private company Northwest Nonferrous Mining Australia, for up to a year.
The extension came with several terms, which has shaved about $100,000 off the $15 million acquisition price.
Settlement has now been extended to the end of January 2019.
“We have developed a great working relationship with our Chinese partners,” Mr Lill said.
“We do not see it as a partnership as reflected by their willingness to receive De Grey shares when we settle.”
De Grey shares were up 46.6 per cent to 22 cents each at 1pm.
