De Grey Mining Limited (ASX: DEG) announced today that the company has received a firm commitment to subscribe for 83.4 million newly issued shares at a unit price of A$1.2 per share and a total of A$100 million in financing.
In this additional issuance, two investment banks, Argonaut Securities and Canaccord Genuity (Australia), act as joint sponsors and joint bookrunners. Bell Potter is the deputy sponsor of this additional offering. Azure Capital Pty Ltd served as the corporate advisor for this additional issuance.
Announcement highlights
The company has received approximately 83.4 million additional shares subscription commitments. The unit price of the new shares is A$1.20 per share, which can raise A$100 million without including any expenses;
The price found this time was 16.4% discount to the closing price of the previous trading day, and 1.0% premium to the company's trading volume-weighted average price over the past 10 days;
This additional issuance is a high recognition of Degre's assets;
Major shareholder DGO will continue to participate in the subscription of additional issuance, and other international institutional investors also participated in this subscription;
The funding this time will help the company continue to carry out extension and resource drilling in Hemi Discovery, test mineralized intrusions near Hemi, exploration of regional intrusions, and mineralized targets controlled by shear zones. Upgrade the mine infrastructure and early de-risk research of the project.
Glenn Jardine, Managing Director of Degery said:
Hemi Discovery in the Mallina Basin is rapidly moving towards our goal of identifying top projects with real regional scale potential. The mineralization of Hemi has been determined in an area spanning more than 2.5 kilometers from north to south and more than 2 kilometers from east to west, and the depth tested in the area is more than 400 meters.
"This major financing has given Degrey a strong financial strength, allowing this mineralization potential to create greater value for all of our shareholders. The support from most of the older shareholders and some new shareholders allows the company to maintain Its large-scale drilling plan, while accelerating exploration in certain areas. Our goal is to maintain at least six drilling rigs in operation by the second half of 2021, which will continue to bring laboratory results to the market and increase our yellow ore resources Inventory. We have found 2.2 million ounces of resources in the shear structure mineralization and hope to conduct the first resource assessment for the Hemi Discovery before mid-2021, thereby greatly increasing the overall resources of the project.
"The participation of many global precious metals and long-term fund investment companies is another recognition of our potential and strategy. We thank all participants in this financing.
"Degre has never had better conditions than now to achieve the goal of our Hemi Class 1 gold project.
In this subscription, the major shareholder DGO Gold Limited (ASX: DGO) promised to invest another 12 million Australian dollars and will hold 15.8% of the shares after the subscription is completed. Non-executive director Peter Hood (Peter Hood) will also invest another A$360,000.
Major shareholder DGO and Mr. Hu De’s investment need to be approved by shareholders and will be voted at the special shareholders meeting at the end of October 2020. After May 2018, DGO invested a total of A$43 million in Degre.
At the same time as this additional issuance, non-executive director Simon Lill, executive director Andrew Beckwith, and CFO and secretary of the board Craig Nelmes have sold their shares, a total of 2.6 million shares, at the same price as the subscription price.
index
Since September 21, 2020, the company has been included in the S&P/ASX 300 index calculation. The company will also be included in the MVIS Junior Gold Mining Company Index (MVGDXJ).
Both indexes include Degre, which is an important milestone in the company's continued growth and demonstrates to shareholders the success of our exploration strategy.
Use of funds
The company currently has two diamond drilling rigs, two RC drilling rigs and one AC drilling rig in operation in Hemi, and one AC drilling rig is drilling in a larger area of Hemi. These funds will be used to continue drilling for extension and resource definition until 2021.
On a larger scale, Hemi's mineralization system remains open in direction and depth. Currently, multiple drilling rigs are testing extended targets. Just like the new deposits discovered in Falcon and Crow recently, there is still considerable exploration space in the boundary of Hemi discovery, which can further expand and enhance the scope of mineralization.
Today, Degre's share price fell 2.44% to 1.4 Australian dollars, with a market value of 1.68 billion Australian dollars.
