DGO Gold to invest $5m in Pilbara’s De Grey Mining
Ed Eshuys’ DGO Gold will pay a premium to take up to a 10 per cent stake in fellow Pilbara conglomerate gold play De Grey Mining.
DGO announced last week it would invest $5 million in the Simon Lill-led explorer at 20¢, giving it an initial 7 per cent stake.
A one-for-two option issue will potentially boost its stake to 10 per cent.
The 20¢ price represents a near 18 per cent premium to De Grey’s last traded price of 17¢ last Monday before the deal was announced.
DGO said it would fund the investment via a one-for-two rights issue priced from 70¢-80¢.
Five major share and option holders have committed to the raising.
It described De Grey as one of the best-positioned gold explorers in WA, with 1.2 million ounces of gold resources delineated across its Pilbara tenements with the potential for resource extensions as well as its conglomerate gold prospects.
De Grey said its drilling contractor, Top Drill, would also subscribe for $1 million in shares and noted it stood to receive another $6 million from the exercise of 10¢ options expiring at the end of November.