PERTH (miningweekly.com) – ASX-listed DGO Gold has taken a 7% stake in fellow-listed De Grey Mining.
Under the investment agreement, announced on Tuesday, DGO would subscribe for 25-million ordinary shares in De Grey, priced at 20c each, for a total investment of A$5-million.
In addition, DGO would receive 12.5-million unlisted options, exercisable at 25c each on, or before, the end of November 2019, and a further 12.5-million unlisted options, exercisable at 30c each, on, or before, the end of May 2021.
Assuming that DGO exercised all its options, its shareholding in De Grey would increase to 10%.
DGO executive chairperson Eduard Eshuys said that the decision to invest in De Grey came after an extensive review of opportunities for DGO to participate in brownfield exploration and discovery of gold resources in Western Australia.
“Multiple existing gold deposits aggregating over 1.2-million resource ounces, more than 40 geochemical anomalies, very little drilling below 100 m and over 200 km of grossly under explored shear zones positions De Grey as a standout world class gold exploration play,” Eshuys said.
“We believe De Grey’s structural gold mineralisation and associated large exploration upside has the potential to host aggregate gold resources sufficient to support a medium- to large-scale production operation.”
He noted that DGO also supported De Grey’s planned acceleration in exploration activities, and was expecting significant resource growth at an attractive discovery cost per ounce.
De Grey chairperson Simon Lil welcomed the DGO investment, saying that the junior would use the funds raised to expand its current exploration programme across Western Australia.