The West Perth company says the proceeds, in tandem with cash on hand, will fully fund the equity component of its $1.3 billion Hemi gold project in the Pilbara.
De Grey Mining has launched a fully underwritten $600 million equity raising it says will fully fund the equity component of its Hemi gold project in the Pilbara.
The proceeds are in addition to $313 million of cash on hand.
Having locked in its equity funding, De Grey said it expected to receive credit-approved term sheets from debt financiers by mid-2024.
De Grey said the majority of prospective lenders supported an aggregate $1 billion in debt funding plus a typical cost over-run facility.
The multiple funding sources would be designed to cover the project’s estimated capital cost of $1.345 billion plus a substantial liquidity buffer.
The company said the equity raising would allow better planning and management of its capital works program including near-term ordering of long-lead items and appointment of civil contractors for early site works.
Full construction activities are expected to commence at Hemi in the second half of calendar year 2024 and based on an estimated two-year construction period, De Grey is targeting first gold production in the second half of 2026.
It anticipates annual gold production of 530,000 ounces over the first 10 years of the Hemi project, making it one of Australia’s top 5 gold producers.
In parallel with developing the Hemi project, De Grey said it will continue to focus on growth and exploration including greenfield exploration across the region.
Managing director Glenn Jardine said the support from key stakeholders provided validation of De Grey’s strategy.
“The underwritten equity raising represents a landmark milestone and a key de-risking event for De Grey,” he said.
“This Equity Raising will underpin our ongoing project debt financing workstreams which are progressing well.”
The raising comprises an institutional placement to raise $344 million and a 1-for-7.95 entitlement offer to raise $256 million.
The raising is priced at $1.10 per share, a discount of 13 per cent to the last closing share price.
Canaccord Genuity (Australia) and Argonaut Securities are joint lead managers while Canaccord and Argonaut PCF are joint underwriters.
Azure Capital is corporate adviser to De Grey and Gilbert + Tobin is legal adviser.
