Eastern Goldfields raises A$25m for Davyhurst

PERTH (miningweekly.com) – ASX-listed Eastern Goldfields will raise a minimum of A$25-million through a share placement to complete the commissioning of the Davyhurst operation, in Western Australia.

The company on Tuesday said that it would issue up to 80-million shares, at 35c each, to sophisticated, professional and institutional investors, and will also take oversubscriptions of an additional 20-million shares, subject to final demand from offshore investors.

The placement will be completed in two tranches, comprising 54.4-million under the company’s available placement capacity, and a further 45.6-million subject to shareholder approval.

“We are delighted to have received such strong support from a number of leading institutional precious metal and resource investors from Australia, Europe and the US,” said Eastern Goldfields executive chairperson Michael Fotios.

“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. 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.”

The 1.2-million-tonne-a-year Davyhurst gold processing plant has been on care and maintenance since 2008, and is being refurbished and recommissioned to process ore from the nearby production sources within the Davyhurst hub.

In addition to the refurbishment work, which started in September last year, Eastern Goldfields is also building a new raw water dam with storage capacity equivalent to seven days of raw water supply, with an upstream tailings lift of the existing tailings storage facility, to provide 12 to 18 months of capacity.

A 5.5 MW containerised diesel-fired power station and a 550 000 ℓ fuel storage facility is also being installed to supplement the existing grid power supply.