Eastern Goldfields will raise at least $25 million through a share placement to fund commissioning of the Davyhurst gold operation in Western Australia.
The company announced that firm commitments have been received from sophisticated, professional and institutional investors to raise a minimum $25 million, and as much as $28 million, through the issue of up to 80 million shares on the ASX at 35 cents each.
Funds raised will be used towards commissioning of the Davyhurst plant, resource definition drilling, expedited exploration drilling and general working capital.
The placement will be completed in two tranches, comprising 54.4 million shares under the company’s available placement capacity, and an additional 45.6 million subject to shareholder approval.
Eastern Goldfields executive chairperson Michael Fotios said the company was delighted to have received strong support from leading institutional precious metal and resource investors from Australia, Europe and the United States.
“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,” Fotios said.
“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.”
Davyhurst, located 120km northwest of Kalgoorlie, has been on care and maintenance since 2008.