Ann: Proposed issue of Securities - DEG, page-2

De Grey Mining raises $31.2 million off the back of Hemi gold discovery
Funds raised will be used to continue exploration activities at Mallina Gold Project, with immediate priority on the Hemi prospect.
https://static1.*.com.au/thumbs/upload/News/Image/2020_04/672z311_1588040418_shutterstock_438126106.jpg
The placement pricing represents a 12.5% discount to the last closing price

De Grey Mining Limited (ASXEG) has received firm commitments for a placement of around 111.4 million shares at a price of 28 cents per share to raise $31.2 million.
Proceeds of the offer will fund ongoing exploration with a priority on the Hemi gold discovery in WA's Pilbara region and associated targets along the Scooby to Antwerp Trend, as well as certain early-stage development initiatives.
"Extremely pleased"

Executive chairman Simon Lill said: “Since announcing the Hemi discovery on February 6, this year the company been flooded with offers to assist in a capital raising or direct investment.
“We recognised the opportunity to secure further funding and to build a strong register to assist with funding requirements into the future through the introduction of global blue-chip gold only and resource funds.
“We chose to proceed with the capital raising once we were comfortable with the level of interest and are now extremely pleased to advise that many of the world’s top funds in this sector have joined our register.
“We thank the brokers, Bell Potter and Argonaut, for their efforts with this important raising, as well the ongoing support of our major shareholder, DGO Gold Ltd (ASXGO).”
The placement is to sophisticated, professional and other exempt investor clients of Bell Potter Securities Limited and Argonaut Securities Pty Ltd who are acting as joint lead managers to the placement.
Placement conditions

Under the placement, DGO Gold Limited will continue to maintain its interest at 16.35% in the company through the further contribution of about $5.1 million, which will be subject to De Grey shareholder approval via an extraordinary general meeting.
Additionally, director Peter Hood will seek approval for the issue of $280,000 worth of stock to entities associated with him.
The issue of the placement shares is expected to occur on Friday, May 1, 2020.
do not advertise external links.au/upload/CKEditor/De Grey Mallina Gold Project JPEG.jpg
Mallina Gold Project showing main gold deposits and the new Hemi Discovery
“Well funded" for foreseeable future

Lill said: “This is an extremely strong validation as to the quality of De Grey’s Hemi discovery and the Mallina Gold Project and to that end I would like to congratulate and thank the technical and support staff who have been part of making this possible.
“The recent Hemi discovery also highlights the outstanding exploration potential De Grey has across our tenements, with the market also now giving recognition to our existing 2.2 million ounces of resources.
“De Grey is now well funded to continue its exploration programs into the foreseeable future.”
The company intends to use the funds as follows:

• $22 million for exploration and to further fund extensive drill programs;
• $1.6 million for capex including operational camp infrastructure;
• $2.5 million for corporate and administration costs;
• $3.475 million for working capital; and
• $1.625 million for expenses of the offer.

The board reserves the right to alter the way the funds are applied.
Exploration ongoing

Exploration activities across the Mallina Gold Project will continue, with a priority of work associated with determining the scale of the Brolga, Aquila and crow deposits at the Hemi discovery.

Two diamond rigs and one RC rig are in operation with drilling based on 80 metres x 80 metres spacing with the aim to delineate an initial inferred resource at each deposit.
Funds raised will also support the recommencement of regional drilling programs targeting the other four intrusion targets at Scooby, Antwerp, Alectroenas and Shaggy, along the highly prospective structural corridor.
Next steps

Metallurgical studies on the Hemi mineralisation, including domaining for oxide, transition and fresh ores, are ongoing.
The company anticipates an initial maiden Hemi resource will be announced in the second half of the year.
Corporate position

The company completed several capital raisings as a result of unlisted options being exercised during the March quarter, including:

• 11.1 million shares raising $500,000 before costs to DGO Gold – representing the second tranche of an overall $5 million placement;
• 22.5 million shares raising $4.75 million before costs to DGO Gold arising from DGO’s early conversion of 10 million options exercisable at 10 cents per share (with an expiry date of May 30, 2021), and 12.5 million options exercisable at 30 cents per share (with an expiry date of December 13, 2021);
• $100,000 received in relation to the exercise of 1 million options exercisable at 10 cents per share with an expiry date of October 31, 2020; and
• The issue of 5.5 million unlisted options to employees and key consultants under the terms of its directors and employees option plan for 35 cents per share with an expiry date of March 11, 2022.

At the end of the March quarter, the company had $9.9 million in cash.