Trading in Dacian Gold has been suspended since the start of February. Arsineh Houspian
As first reported by this column, the troubled gold miner was set to launch a $100 million-odd capital raising on Wednesday to help save it.
Sources said the deal was structured as a rights issue and placement, likely split 70-30, and priced at 30¢ a share. Dacian’s shares last traded at $1.40.
Canaccord Genuity and Macquarie Capital were expected to launch the deal overnight, sources said. It is understood a handful of local funds had already been locked to cornerstone the offer.
Trading in the small cap gold miner has been suspended since the start of February and in that time the company has been assessing its recapitalisation options
New chief executive Leigh Junk outlined the company’s recapitalisation strategy to the market in mid-March. Junk said the company would have to raise equity in order to meet a scheduled debt repayment of $24.7 million due before April 30.
Other aspects of the recapitalisation strategy included implementing a new three-year mine plan and accelerating potential new sources of resource production.
The new mine plan outlined less-than-expected annual gold output and a pivot to production that is based predominantly on open-pit sources rather than underground ones.
Junk said the company also wanted to improve its working capital position, “to allow the group to pursue exploration and new mine development activities that have a high potential of success in contributing to the group’s mine plan and cash flows in the short term”.
AFR April 7
Be the first to comment