29/11/2016 - 10:45

Dacian taps investors for $150m

29/11/2016 - 10:45

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Aspiring miner Dacian Gold has launched a $150 million capital raising to fund a big portion of the development costs for its Mt Morgans gold project near Laverton, which is expected to begin operating by 2018.

Dacian taps investors for $150m
Dacian Gold's Mt Morgans gold project near Laverton.

Aspiring miner Dacian Gold has launched a $150 million capital raising to fund a big portion of the development costs for its Mt Morgans gold project near Laverton, which is expected to begin operating by 2018.

Perth-based Dacian will raise $50 million through the placement of 18 million shares at $2.75 each, plus a further $100 million by way of a four-for-15 entitlement offer at the same price.

The price of the raising represents a 5.6 per cent discount to the company’s five day volume-weighted average price.

The raising is equal to the second-largest undertaken by a Western Australian-based company this year, with gold miner Resolute Mining asking the market for $150 million in September.

Independence Group retains the crown with the largest capital raising for 2016 so far, with a $250 million placement completed in late July.

Dacian chairman Rohan Williams said the raising would pave the way for the company to quickly start construction and mine development at Mt Morgans, which has a development capex of $220 million, and keep on track with scheduled first production in the first quarter of 2018.

“It will also fund exploration campaigns aimed at making more discoveries on our extensive and highly prospective land-holding at Mt Morgans, where we believe the opportunity to continue to grow our gold inventory is exceptional,” he said.

“Project debt discussions to cover the balance of the estimated $220 million capital cost plus contingency are well advanced, and we expect to complete the project finance package this quarter – allowing us to begin construction early next year.

“(Mt Morgans) has a 16-month timeline to first production, an attractive capital and operating cost profile and a projected capital payback of just 21 months.

“It also has a compelling growth profile, as outlined in the recent expansion pre-feasibility study, above the initial 1.2 million ounce Ore Reserve.”

Dacian released its PFS on Mt Morgans earlier this month (completed by Perth-based GR Engineering Services), which detailed a $172 million cost to develop infrastructure at the project including a 2.5 million tonnes per annum treatment facility, with mine establishment costs to come in at $48 million.

The project has an initial eight-year mine life.

Canaccord Genuity and Euroz Securities acted as joint lead managers to the raising, with Treadstone Resource Partners acting as financial advisers.

Shares in Dacian were unchanged at $2.97 each at 10:30am.

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