Gascoyne Resources has raised $19 million through an oversubscribed placement.
The company issued 50 million shares at 30 cents each – a 16.7 per cent discount to the company’s closing price on August 15 – with the option to accept oversubscriptions for a further $4 million.
The oversubscription was headed by the Hong Kong-based fund manager LIM Advisors at $10 million.
Gascoyne received a strong interest from existing shareholders as well as new local and international institutional investors.
Managing director Mike Dunbar said, “We are grateful for the support received from both existing and new investors – as well as the strong support from LIM Advisors which cornerstoned the placement.
“We are also pleased to give our shareholders an opportunity to participate on the same terms as the placement through the upcoming share purchase plan (SPP).”
The new shares will be issued at the same price as the placement to raise an additional $5 million. The SPP is part of Gascoyne’s target to raise up to $24 million for its Dalgaranga gold operation in Western Australia.
The funds will be used for construction capital at Dalgaranga, final payment of the project’s vendor and exploration.
Dunbar said, “The completion of the placement ensures that we have the financial flexibility we need as Dalgaranga ramps up towards commercial production.
While initial mining rates have been slower than anticipated, our processing facility is running extremely well and mining rates are now within 10 per cent of scheduled maximum rates.”
Gascoyne continues to ramp up operations at the Dalgaranga site, which includes a 2.5Mt/y processing facility.
The company poured first gold during the June quarter and reported last month that 7400oz had been recovered from the project.
Gascoyne plans to declare commercial production in the second half of the 2018 calendar year once it has increased activities to its target mining rate.
The company plans to produce 100,000oz/y at Dalgaranga.