Eastern raises $28m for Davyhurst

Eastern Goldfields has announced a $28 million capital raising and share sale facility as it works towards commissioning of its Davyhurst gold operation near Kalgoorlie.

Perth-based Eastern said it would raise the funds through the placement of up to 80 million shares at 35 cents each, with a minimum target of $25 million set.

The funds raised will be put towards commissioning work at Eastern’s Davyhurst plant, as well as drilling exploration work and for general working capital.

“We are delighted to have received such strong support from a number of leading institutional precious metal and resource investors from Australia, Europe and US,” executive chairman Michael Fotios said.

“The proceeds will allow us to finalise commissioning and fund the imminent commencement of production at Davyhurst, moving the company closer to cash flow generation.

“Upon completion our balance sheet will be considerably strengthened, enabling the company to expedite resource definition and exploration drilling as part of our growth strategy.”

Eastern also announced plans to undertake a share sale facility, giving shareholders who hold less than $500 worth of Eastern stock the opportunity to sell their interests without incurring broker costs.

Eastern said the facility would reduce administrative costs associated with maintaining a large number of small holdings.

The sale price is yet to be determined, but the company said it would be no less than a 10-day volume-weighted average price figure.

Morgans Corporate acted as broker to the placement, with Jett Capital Advisors as North American adviser.

Eastern shares were 8 per cent higher to 40.5 cents each at 10:45am.