Yahoo Finance De Grey Mining Plans To Raise $395M For Major Gold Project In Australia
De Grey Mining (OTCPK: DGMLF) has announced an ambitious plan to raise $395 million (A$600 million) to support the financing of its Hemi Gold Project in Western Australia’s Pilbara region. The equity raising is a strategic move to fulfill a pre-condition for debt financing, allowing the company to progress with its construction activities and ultimately achieve the first gold production in the second half of 2026.
"Proactively finalizing the equity component of the (Hemi) project financing allows better planning and management of the forward capital works plan, including near-term ordering of long-lead items and contractor appointments," the company said in a statement.
The specifics of the equity raising will result in issuing 545.5 million shares through an institutional placement of A$344 million and a 1-for-7.95 pro-rata accelerated non-renounceable entitlement offer for A$256 million. The placement’s issue price of A$1.10 represents a 15% discount to the stock’s closing price on May 7, which was A$1.27.
“The underwritten equity raising represents a landmark milestone and a key de-risking event for De Grey,” said Managing Director Glenn Jardine.
“The significant level of support received from key stakeholders to date provides strong validation of the high-quality nature of Hemi and our strategy of becoming a material Australian gold producer,” he added.
The Hemi Gold Project has gained considerable attention as a prospective tier-1 gold mine. It is part of the larger Mallina Gold Project and boasts a significant mineral resource estimate of over 12.6 million ounces. The project is designed for large-scale, low-cost open-pit mining, with a projected output of 530,000 ounces annually over the first decade of production.
The refractory nature of much of the ore at Hemi requires complex processing techniques, leading De Grey to opt for pressure oxidation (POX) as the primary method for gold extraction. This choice aligns with industry practices, as pressure oxidation is used in about 40% of the world’s gold production.
Project director Peter Holmes was in charge of commissioning Barrick's Pueblo Viejo project in the Dominican Republic, one of the largest POX plants worldwide.
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