31/08/2015 - 10:58

Doray locks in Deflector funding

31/08/2015 - 10:58

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Gold miner Doray Minerals is seeking to double its workforce to support its Deflector project, after announcing it has secured $91.7 million in funds to bring the project into production.

Doray locks in Deflector funding
Construction of a mine access road at Doray Minerals' Deflector Gold project in the Murchison region.

Gold miner Doray Minerals is seeking to double its workforce to support its Deflector project, after announcing it has secured $91.7 million in funds to bring the project into production.

Doray has received firm commitments for a $13.8 million capital raising to new and existing sophisticated and institutional investors, with 34.4 million shares to be placed at 40 cents each.

Managing director Allan Kelly said the placement was made at a minimal 4 per cent discount to recent trading prices.

The company also plans to undertake a fully underwritten two-for-17 non-renounceable entitlement issue, at the same price as the placement, to raise $12.9 million.

Doray has also tapped Westpac for an additional $65 million in new debt funding, to bring its total Westpac loan to $90 million.

Mr Kelly said with existing cash reserves, projected cash flows from Andy Well over the next 12 months, and the proceeds from the Westpac facility (along with today’s equity raising), Doray was now fully funded for all construction, development and working capital costs to bring Deflector into production.

“We can now focus on growing the company through the development and commissioning of our second high-grade, low-cost gold operation at Deflector,” he said.

“We’re in a recruitment phase at the moment and we’re nearing completion on negotiations with our offtake partners.”

Mr Kelly said the number of staff at Deflector would roughly match that of its Andy Well project.

“Andy Well’s currently running at about 65 Doray staff plus contractors, so we run a total crew at Andy Well of about 200. So you’re looking at similar numbers for Deflector plus a little bit more,” he said.

“We’ll go from a total Doray staff of 90 to about twice that.”

Mr Kelly said concrete works had recently started at Deflector, while temporary accommodation was currently being installed at the Gullewa construction camp.

“Production is scheduled to begin mid-next year,” he said.

GMP Securities acted as lead manager to the placement and underwriter to the entitlement issue, while PCF Capital Group acted as the sole financial adviser to the facilities.

Shares in Doray were 1.1 per cent lower to 41.5 cents at 10:55am.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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