De Grey Mining (OTCPK: DGMLF) has announced an ambitious plan to raise $395 million (A$600 million) to support the financing of its Hemi Gold Project in Western Australia’s Pilbara region. This equity raising is a crucial step to secure funds for the project’s construction activities and accelerate the timeline for achieving first gold production in the second half of 2026.
“Proactively finalizing the equity component of the Hemi project financing allows better planning and management of the forward capital works plan, including near-term ordering of long-lead items and contractor appointments,” the company mentioned in a statement, highlighting the strategic importance of the move.
Equity Raising Strategy
The specifics of the equity raising involve issuing 545.5 million shares through an institutional placement of A$344 million and a 1-for-7.95 pro-rata accelerated non-renounceable entitlement offer for A$256 million. The pricing strategy, including a 15% discount to the stock’s closing price, aims to attract investors and strengthen the company’s financial position.
Managing Director Glenn Jardine expressed that the equity raising marks a significant milestone for De Grey and showcases strong support from stakeholders, validating the potential of the Hemi Gold Project.
Project Overview
The Hemi Gold Project, part of the Mallina Gold Project, has garnered attention due to its substantial mineral resource estimate of over 12.6 million ounces, positioning it as a promising tier-1 gold mine. Its projected annual output of 530,000 ounces over the first decade signals a potential for significant gold production in the region.
Peter Holmes, the project director, brings valuable experience from leading the commissioning of Barrick’s Pueblo Viejo project, one of the largest pressure oxidation (POX) plants globally. The utilization of POX for gold extraction underscores the project’s commitment to adopting industry best practices for efficient processing.
Industry Implications
De Grey’s strategic equity raising and focus on advanced processing techniques like POX reflect the evolving landscape of gold mining operations, with an emphasis on optimizing production efficiency and resource utilization. As the company progresses with its ambitious plans, it sets a precedent for sustainable and innovative approaches within the mining sector.
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