Why Dacian Gold Is in a Trading Halt Today (ASX:DCN)
The Dacian Gold Ltd [ASX:DCN] is in a trading halt today after announcing a $40 million equity raising.
Dacian Gold is an Australian gold miner with operations in Western Australia.
What’s the deal?
Dacian Gold is looking to raise $40 million to accelerate their three-pillar growth strategy.
The idea is to use $20 million to fast track Dacian’s drilling program at Mt Morgan and Redcliffe, which includes 300,000 m of AC, RC, and DD drilling.
Then to spend $10 million to advance the Redcliffe deposit into production, and the remaining $10 million to restart underground production at the Greater Westralia Mining area.
Leigh Junk, Dacian’s Managing Director, had this to say:
‘A busy FY2021 where we established our platform for growth through the acquisition of the Redcliffe project and completion of the technical evaluation of Greater Westralia, has culminated in the opportunity to accelerate multiple mines into production simultaneously.
‘In combination with our extensive targeting work across Mt Morgans and Redcliffe to identify new base load discoveries, we have undertaken this capital raise to both aggressively pursue these exploration targets and advance the development of these mines.
‘Bringing these high-grade underground and open pit mines into production at Mt Morgans and Redcliffe will provide flexibility and diversity to our operations as well as increased margins for the business as we work to bolster our upcoming Life-of-Mineplan.’
Dacian Gold accelerating growth as gold moves higher
Dacian is offering around 142.9 million shares at 28 cents a share. That’s about an 8.2% discount from where Dacian shares last traded. Dacian shares closed yesterday at 30.5 cents and are now in a trading halt.
The raising will be done in two tranches. In tranche one they’ll be issuing about 99.3 million new shares to raise $27.8 million. The second tranche will issue around 43.6 million new shares to raise around $12.2 million, which is dependent on shareholder approval.
Dacian gold is fast-tracking growth plans as gold moves higher. Gold spot prices have so far increased 13% since April and are currently at US$1,906 an ounce.
Australia could be set to become the ‘epicentre’ of the next gold bull run. Check out some of the reasons why here.
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