Gascoyne raises cash for WA gold exploration projects

PERTH (miningweekly.com) – ASX-listed Gascoyne Resources would raise about A$15-million through a share placement to fund an aggressive exploration programme at its Dalgaranga and Genburgh gold projects, in Western Australia.

The junior gold company said on Monday that the share placement would take place in two tranches, with the first tranche consisting of about 33.3-million shares, priced at 33c each. The first tranche would be placed under the company’s existing capacity.

A second tranche of 12.2-million shares, also priced at 33c a share, would be subject to shareholder approval.

“The overwhelming demand for the placement from a large number of well respected investors provide a strong endorsement of the quality of our portfolio, which includes both a near-term high margin gold development asset at the Dalgaranga project, and the Glenburgh project in the Gascoyne region, which provides the company with the ability to grow organically into a 200 000 oz/y gold producer in the medium term,” said Gascoyne MD Mike Dunbar.

A recently completed prefeasibility study at the Dalgaranga project estimated that the mine would require a capital investment of around A$75-million to develop a 2.5-million-tonne-a-year operation.

Based on the current resource of 23.7-million tonnes, grading 1.4 g/t gold for 1.05-million ounces, the Dalgaranga gold project was expected to deliver an initial 547 000 oz of gold over its six-year mine life, with production estimated at 104 000 oz/y.

Dunbar said on Monday that funds raised through the placement would be used to grow the resource base at each of the projects and would be used to complete the final feasibility work at the Dalgaranga project.

Funds raised in the placement would also provide Gascoyne with the financial flexibility to secure certain long-lead items required to accelerate the development of Dalgaranga, if the feasibility study supported early expenditure.