De Grey Mining Limited (ASX: DEG, 'De Grey' or 'Company') is pleased to announce the launch of a fully underwritten two tranche placement of new fully paid ordinary shares to raise A$300 million (before costs) ('Placement').
The new ordinary shares in the Company ('New Shares') are to be issued under the Placement at a price of $1.05 per New Share.
Gold Road Resources Limited ('Gold Road'), a major shareholder of the Company, has committed to subscribe for: 49,438,097 New Shares under Tranche 1 of the Placement and such number of New Shares representing 19.9% of the New Shares offered pursuant to Tranche 2 of the Placement.2 Proceeds from the Placement (subject to shareholder approval for Tranche 2), together with existing cash, will be applied to: finalising detailed engineering, updating the Hemi Gold Project ('Hemi' or 'Project') execution plan, refine the contracting strategy, advance major project tenders and progress the approvals processes; ordering of long-lead major equipment items ahead of planned construction activities; early works (where approvals allow) undertaken ahead of Final Investment Decision ('FID'); continued exploration drilling across both the Greater Hemi and regional areas and general working capital purposes and costs of the Placement.
The Placement will provide the Company with significant balance sheet strength and flexibility to progress activities to support the Project execution schedule. The Company will now fast-track the ordering of long lead items, complete detailed engineering, refine the contracting schedule and advance major Project tenders. The Placement follows the release of the outcomes of De Grey's Definitive Feasibility Study ('DFS') for Hemi today, which outlined attractive financial outcomes and provides a strong platform for De Grey to progress the Project execution schedule. The De Grey Board has endorsed the DFS outcomes with early Project implementation activities to shortly commence.
The Hemi-only JORC Probable Ore Reserve has increased by 0.9Moz to 121Mt @1.6g/t Au for 6.0Moz with high confidence production profile underpinned by 99% Probable Ore Reserves from Hemi over the current 12-year evaluation period. The DFS confirms Hemi's status as a Tier 1 gold project, which once in production, is expected to be a top five Australian gold mine4 and in the lowest AISC quartile for large Australian gold mines based on FY23 figures.4 Hemi is also considered a top three global undeveloped gold project based on targeted average annual gold production.4 The Company targets the project financing process to be completed in mid-2024 ahead of a FID. Full construction activities are expected to commence at Hemi in the second half of calendar year 2024 and based on an estimated two-year construction period, first gold pour at Hemi is targeted for the second half of calendar year 2026.
De Grey Managing Director, Glenn Jardine, commented: 'Delivery of the Hemi DFS is a major milestone for the Company and sets a solid foundation from which the Company can proceed with confidence to the next stage of development of the Hemi Gold Project. Physical and financial outcomes of the DFS reaffirm the quality and attractiveness of the Project and confirm its Tier 1 status. Alongside its spectacular gold endowment, the Project is also located in the major mining services centre of the Pilbara, with world class infrastructure at hand. These attributes - along with the quality of studies, testwork and the major milestones achieved - mean the Project has been significantly de-risked over the last three and a half years. De Grey's Board has endorsed the outcomes of the DFS and approved the commencement of preliminary Project development activities. These activities include ordering critical path long lead items, continuing detailed engineering and refining the Project execution plan, advancing major tenders and finalising the contracting strategy. This will establish the platform for a Final Investment Decision and full Project financing next year, ahead of the start of construction, targeted for the second half of 2024. This indicative timetable and the DFS construction schedule would result in first production from Hemi in the second half of 2026. This Placement is instrumental to the Company's focus on de-risking further the construction through the above activities in support of an updated capital estimate, project funding and FID in mid 2024. It is important to note that in excess of half of the amount targeted to be raised is capital related and will reduce the final capital numbers to be financed.'
Details of the time and venue for the Meeting will be provided in a notice of meeting to be despatched to shareholders in due course. Canaccord Genuity (Australia) Limited is acting as Global Coordinator, Joint Lead Manager, Joint Underwriter and Joint Bookrunner to the Placement. Argonaut Securities Pty Limited is acting as Joint Lead Manager and Joint Bookrunner, and Argonaut PCF Limited is acting as Joint Underwriter to the Placement. Azure Capital Pty Ltd acted as Corporate Adviser to the Placement and Gilbert + Tobin acted as Legal Adviser. New Shares issued under the Placement will rank equally with the Company's existing fully paid ordinary shares.
Contact:
Tel: +61 8 6117 9328
Forward looking statements disclaimer
This announcement as prepared by De Grey Mining Limited (the 'Company' or 'DEG') includes forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as 'may', 'will', 'expect', 'intend', 'plan', 'estimate', 'anticipate', 'continue', and 'guidance', or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs. Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary shareholder approval(s), licenses and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the Company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation. Forward looking statements are based on the Company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company's business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the Company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the Company's control. Although the Company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant securities exchange listing rules, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.
DE GREY MINING LIMITED 
