De Grey Mining has received proposals from 14 lenders to finance the development of its $1 billion star asset in the Pilbara.
West Perth-based De Grey Mining has received proposals from 14 lenders to finance the development of its $1 billion star asset, the Mallina gold project in the Pilbara.
The company has received non-binding proposals from 14 banks and financial institutions for the traditional project debt funding portion of the Mallina's overall development financing package.
Majority of the lenders have indicated a debt funding capacity of about $800 million based of the company’s pre-feasibility study (PFS), according to De Grey.
The PFS released in September 2022 estimated pre-production costs would come in at around $1.05 billion due to increased labour, equipment and diesel costs.
The study detailed annual gold production of 473,000 ounces had been boosted to 550,000 ounces for the first five years, before hitting peak production of 637,000 ounces in year five.
Total production for Mallina is slated at 6.4 million ounces over a 13.6-year mine life.
Based of the PFS estimates, Mallina could become one of the top five gold mines in Australia ahead of the likes of Northern Star’s KCGM operation and Newmont’s Tanami.
The gold project is expected to become operational in 2025.
Azure Capital has been appointed as the corporate and debt financing advisory and Wright Legal is acting as the debt legal advisory.
The project financing process is expected to be completed in the second half of 2023, while the definitive feasibility study is targeted for the middle of the year.
De Grey chief financial officer Peter Canterbury said they were heartened by the strong response to their request for traditional project financing proposals for the Mallina Gold Project.
“A range of indicative proposals have been received from highly regarded financial institutions which have significant experience in the mining sector,” he said.
“The company feels confident that it can deliver an attractive funding package for the development of the project, subject to a final investment decision by the De Grey board.
“During 2023 we will further assess and progress various debt, equity and other strategic funding sources available to determine the optimum financing structure to deliver the greatest long-term value for De Grey shareholders from the Tier 1 discovery at Hemi.”
On the market, De Grey Mining shares were up 2.83 per cent to trade at $1.46 at 1.58PM AEDT.
