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Gascoyne Resources unveils $50m recapitalisation package

admin by admin
February 28, 2023
in News


The firm will utilise the proceeds on work at its Never Never and Dalgaranga projects in Western Australia. Credit: Jingming Pan on Unsplash.

Gold mining firm Gascoyne Resources has launched a $50m funding package to support its exploration activities, and care and maintenance costs.

This package includes a $26.3m equity raise, a $2.5m loan from Delphi, and a cornerstone investment of $21.3m from Tembo Capital.

The equity raise includes an $8.6m placement to sophisticated investors at $0.10 a share, and a $17.6m 1-for-2.42 entitlement offer at the same amount.

This offer price marks a 49% discount to Gascoyne’s stock close on 4 November 2022.

The investment from Tembo will consist of a $6.3m secured loan that will convert to a gold royalty, along with a $15m secured loan that will convert to Gascoyne shares at $0.10 a share.

In addition, Gascoyne’s largest existing shareholder Delphi agreed to a $2.5m unsecured loan that will convert to a gold royalty, alongside up to $5.8m investment in the equity raise.

The firm will utilise the proceeds for its Never Never and Dalgaranga projects in Western Australia.

This includes $24.9m for Never Never exploration, and $11.6m for Dalgaranga care and maintenance costs.

In addition, $11.6m will be used as corporate costs and general working capital, $6m for redundancy costs and liability extinguishment, and $5.2m for transactional and other costs.  

Part of the capital will be used to pay amounts owed to certain creditors due to the decision to halt Dalgaranga’s operations.

The miner suspended operations at Dalgaranga in November 2022 as production was affected by extreme rainfall, labour shortfall and the pandemic.

Operations at Dalgaranga are planned to resume in the second half of 2024.

After completion of the capital raise, the firm would immediately start an extensive drilling campaign to expand the Never Never deposit and advance it towards production.

Commenting on the move, Gascoyne managing director and CEO Simon Lawson said: “It follows the operational reset, which we successfully implemented at the Dalgaranga gold mine last year and will give us the balance sheet capability to unlock the value of our key assets – the exciting high-grade Never Never gold deposit and our high-quality infrastructure at Dalgaranga.

“Having ownership of a fully operational gold processing plant at Dalgaranga, along with the recent discovery of a +300koz high-grade gold deposit that is still open and growing and located in close proximity to the plant, gives us the opportunity to create an exciting long-term operating and growth plan for the company.”





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