DGO Gold plans to raise up to $5.99 million to fund an investment in Pilbara gold explorer De Grey Mining.
Earlier this week, DGO announced it would make a $5 million investment in De Grey, funds that would be used to advance an exploration program and pre-feasibility study at its Pilbara project in Western Australia.
DGO intends to conduct a one-for-two non-renounceable entitlement offer of its shares to raise between $4.43–$5.99 million to complete the De Grey investment.
Under the entitlement offer, eligible shareholders will have the opportunity to subscribe for one new ordinary share in DGO for every two existing shares.
DGO also plans to use the funds raised for additional working capital and for exploration activities.
De Grey announced this week it would raise $6 million in total; $5 million through DGO and the remaining $1 million with Top Drill.
DGO’s $5 million investment involves 25 million shares at 20 cents each. The company considers De Grey to be one of the best positioned gold explorers in Western Australia due to its 1.2Moz of gold resources in the Pilbara.
Eduard Eshuys, DGO chairman, believes De Grey’s structural gold mineralisation and associated large exploration upside has the potential to host aggregate gold resources sufficient to support a medium to large-scale production operation.
“DGO strongly supports the planned acceleration in exploration activities and anticipates significant resources growth at an attractive discovery cost per ounce through both new discoveries and strike and depth extension of existing discoveries,” Eshuys said.