Dacian aims to raise A$150m for Mt Morgans

PERTH (miningweekly.com) – ASX-listed gold developer Dacian Gold has launched a A$150-million capital raising to fund the development of its Mt Morgans gold project, in Western Australia.

The capital raising will consist of a A$50-million institutional placement and a A$100-million accelerated nonrenounceable entitlement offer.

The company will place 18-million new shares at A$2.75 a share, with a further 36-million new shares to be offered on a 4-for-15 accelerated nonrenounceable entitlement offer.

The offer price represents a 7.4% discount to Dacian’s last closing price, and a 5.6% discount to the five-day volume-weighted average price.

A recent feasibility study into the Mt Morgans mine estimated that the project will require a capital investment of A$220-million to deliver 186 000 oz/y of gold over the first four years of an eight-year mine life.

“Mt Morgans is an outstanding project financially and technically, with immense scope for growth in both the short and long term," Dacian executive chairperson Rohan Williams said on Tuesday.

“It has a 16-month timeline to first production, an attractive capital and operating cost profile and a projected capital payback of just 21 months. It also has a compelling growth profile, as outlined in the recent expansion prefeasibility study, above the initial 1.2-million-ounce ore reserve.”

Williams said the capital raise would pave the way for Dacian to proceed quickly with project construction and mine development, keeping the company on track to deliver first production and cash flow in the first quarter of 2018.

“It will also fund exploration campaigns aimed at making more discoveries on our extensive and highly prospective landholding at Mt Morgans, where we believe the opportunity to continue to grow our gold inventory is exceptional.”

Meanwhile, Williams noted that project debt discussions to cover the balance of the capital cost, as well as contingency, were well advanced, and the company was hoping to complete project financing this quarter.