08/04/2020 - 12:17

Dacian Gold to raise $98m

08/04/2020 - 12:17


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Dacian Gold to raise $98m
Leigh Junk has been leading a review of the Dacian Gold’s operations. Photo: Attila Csaszar

Dacian Gold has announced details of a partially underwritten capital raising priced at just 30 cents per share as it seeks to strengthen its balance sheet and rebuild its mining operations.

The goldminer is seeking to raise $30 million through an institutional placement and $68 million through an entitlement offer.

Dacian will issue about 328 million new shares, representing 144 per cent of existing shares on issue, priced at 30 cents each.

Lead managers Macquarie Capital and Canaccord Genuity Australia have committed to underwrite the capital raising by at least $80 million.

Euroz Securities has been appointed as co-lead manager.

The company’s directors, who currently own 5 per cent of the company, have committed to contribute up to $5.7 million by taking up their entitlements and/or sub-underwriting the offer.

Since the end of January, when the company’s shares were suspended from trading, new chief executive Leigh Junk has been leading a review of the company’s operations.

That review led to an announcement in late February that the company had slashed the mineral resource estimate for its Mt Morgans operation by 40 per cent and reduced expected production.

The company is targeting average production of 110,000 ounces per year over the coming three years at an all-in sustaining cost of $A1,350 per ounce.

Mr Junk said the raising recapitalised Dacian’s balance sheet and transitioned the company into a sustainable and high-margin gold producer.

“Together with the appointment of a new leadership team, an updated and independently verified mineral resource and ore reserve, and a three-year outlook that focuses on proven open-pit operations, this equity raising will effect a recapitalisation that will position Dacian to unlock the full potential of its asset base,” he said.

Mr Junk added that Dacian’s substantial mineral resource, near-mine exploration targets and historical stockpiles of 79,000oz present several opportunities to extend its Mt Morgan operation beyond the three-year outlook.

The company plans to use $50 million to partially repay a debt facility, $15 million for pre-stripping activity, $15 million for exploration, $6.7 million to meet the costs of the offer, and the balance for working capital.

Treadstone Resource Partners and law firm Corrs Chambers Westgarth have been advising Dacian.

Euroz Securities has been appointed co-lead manager.




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