Ann: Investor Presentation - DFS Outcomes & Equity Raising, page-34

Top ASX Stories This Week

DE GREY MINING (ASXEG)

At the top of the list this week – understandably so – is the news that DEG has confirmed development plans for what will become one of Australia’s biggest gold mines, Hemi.
The freshly released definite feasibility study (DFS) pegs the development of a 9.5Moz Au resource that will deliver 530,000ozpa over the first decade and 553,000oz across its first five years from a monster 6Moz reserve grading @ 1.5g/t.
Once developed, it will become the third-largest gold mine in Australia behind Newmont’s Boddington and its soon-to-be-owned Cadia project.
On the same day (yesterday) the news of the DFS was released to the market, it has gone to market to raise $300m for development costs, which us here at * think might be a move by De Grey to shield it from a takeover by, well, take your pick – any mining major would chomp at the bit to get involved.
Although stocking up in the placement was Gold Road Resources (ASX:GOR), the dividend-paying half-owner of the Gruyere gold mine which has maintained a 19.9% stake in De Grey.
While both have similar market caps at around $1.75 billion, it keeps Gold Road’s foot in the door for any M & A activity that may come for the mega gold project.
That grading number might look small, yet it’s the low all-in sustaining costs (AISC) of $1,295 over that 10-year period that’s the real kicker – especially when in Aussie dollars, gold is currently buoyant around the $2,950 mark and shows no signs of abating long term.
Post-tax, Hemi will pay back the project in 1.8 years and contribute a whopping $10.8bn in revenue across the Pilbara and the rest of Australia.