Greatland Gold (LON: GGP) is raising £25m ($30m) at 8.2p a share following Newcrest Mining’s decision not to take up the option to buy a further 5% stake in the Havieron gold project in Western Australia. The fundraising was announced as the market was closing. There are also plans for an ASX-listing in the next 12 months.
Tribeca Investment Partners is putting up $13.8m of the new cash and it has agreed to provide $27.6m of additional funding to finance the development costs of Havieron. Bank debt is also being sought.
Greatland Gold retains a 30% stake in Havieron. The price for the 5% stake had been set at $60m and much of that cash was earmarked to pay off loans from Newcrest Mining.
Greatland Gold management said that it is happy to retain the larger stake, but the Newcrest Mining decision hit the share price, which was 10.4p before the announcement and had fallen to 9.3p ahead of the placing.
The money raised will help to fund Greatland’s share of further drilling and development expenses at Havieron. Greatland Gold will also spend some of the cash on other exploration activities in the Paterson region.
The latest mineral resource for the Havieron deposit announced by Newcrest is 5.5 million ounces of gold and 223,000 tonnes of copper. There has been further drilling success since the data used for this figure. The feasibility study should be published by the end of the year.