Dacian Gold has completed a $26 million share placement that it will use to fund the ongoing development and exploration of the Mount Morgans gold project in Western Australia.
Last week the company outlined plans to raise $150 million, through a $50 million placement and $100 million entitlement offer, to help fund the $220 million project development costs. The raising was to involve the issue of about 54 million shares at $2.75 a share.
However, volatility in the gold price last week caused the company to alter its plans. As market conditions deteriorated, Dacian determined a smaller interim raising, as a placement was preferable over a “dilutionary, larger raising.”
The company, instead, hoped to receive commitments for up to $30 million, at a lower price of $2.50 a share, to reflect the unstable gold market.
Executive chairman Rohan Williams said the decision to alter the original equity raising structure was in direct response to concerns about the company undertaking an overly dilutionary raising in a difficult capital market.
“Importantly, the smaller placement in no way compromises our ability to meet our key milestones in the development of the Mount Morgans project once we obtain permitting approvals, which we envisage will be granted early next year,” Williams explained.
“We will also immediately resume our aggressive exploration campaign aimed at delivering additional exploration success at Cameron well and Jupiter Regional; and building on the 3.3 million ounce mineral resource base.”
Dacian announced last month that it expected the Mount Morgans project to enter production in 2018.