De Grey Mining Raises $5 Million for Pilbara Activities

With a $5-million investment, DGO Gold (ASX:DGO) will be helping De Grey Mining (ASX:DEG) expand and accelerate its exploration program in Australia’s Pilbara region.

De Grey’s primary operation, the Pilbara gold project, includes multiple prospective deposits and has a current resource of over 1.2 million ounces of gold. In a press release, the company said DGO Gold’s investment will be used to expand current exploration and prefeasibility study activities at the asset.

Among other things, the money will be put toward improving base-level exploration data, defining exploration targets and completing resource infill drilling. According to De Grey, an open-pit prefeasibility study is due for completion later this year.

As mentioned, DGO’s investment in De Grey covers 25 million shares priced at $0.20 each for a $5-million investment. DGO will also receive 12.5 million unlisted options exercisable at $0.25 each on or before the end of November 2019, along with a further 12.5 million unlisted options exercisable at $0.30 each on or before the end of May 2021.

In addition, De Grey said it has reached an agreement under which it will issue up to $1 million in equity for services from its drilling contractor Top Drill.

“We are extremely pleased with this endorsement from DGO, one of our Pilbara neighbours. DGO is backed by significant gold investors and led by the well credentialled geologist, Ed Eshuys,” De Grey Chairman Simon Lill wrote in a statement released Tuesday (May 22).

“Recent excitement in the region has been about conglomerate gold. However, DGO have been attracted to our significant and underexplored mineralised shear zones. De Grey will utilise funds raised to expand its current exploration program across this region,” he added.

De Grey’s share price was at AU$0.17 as of 3:35 p.m. PST on Tuesday, up 9.68 percent year-to-date.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.