18/07/2019 - 14:40

De Grey to raise $22m, Eshuys joins board

18/07/2019 - 14:40

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De Grey Mining is seeking to raise $22 million via a share placement and rights issue to complete the acquisition of Indee Gold.

De Grey to raise $22m, Eshuys joins board
Proceeds of the funds raised will primarily go towards completing the acquisition of Indee Gold and its tenements near Port Hedland.

De Grey Mining is seeking to raise $22 million via a share placement and rights issue to complete the acquisition of Indee Gold.

De Grey's second largest shareholder, DGO Gold, will take part in the placement and rights issue and its executive chairman Eduard Eshuys will join the De Grey board.

DGO non-executive director Bruce Parncutt will also be appointed to the De Grey board.

De Grey said it had received commitments for $3 million worth of shares at an issue price of 5 cents each.

This constitutes a discount of 46.8 per cent from its previous closing price of 9.4 cents each.

It will also undertake a one-for-1.28 rights issue at an offer price, also at 5 cents each, to raise $19.1 million.

Bell Potter Securities is the lead manager to the placement and will fully underwrite the rights issue.

Proceeds of the funds raised will primarily go towards completing the acquisition of Indee Gold and its tenements near Port Hedland.

The transaction has been in the works for over two years.

In February 2017, De Grey entered into an option agreement to acquire Indee Gold for a total of $15 million.

It paid a $1.5 million deposit.

The final settlement is comprised of a payment of $9.7 million in cash and the issue of $3 million in scrip.

De Grey is seeking to combine its Turner River project and the Indee project into the $96 million Pilbara gold project.

Shares in De Grey were down 16 per cent to trade at 7.9 cents each at 2.50pm AEST.

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