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DE Grey Mining has secured pledges to support a further A$5 million placement as it ramps up its conventional Pilbara gold exploration plans, with DGO Gold expecting to maintain its 11% equity level by chipping in $500,000.

29 November 2019| Haydn Black

The raising is priced at 4.5c.

Executive chairman Simon Lill lamented the company was unable to issue the shares at a level higher than its mid-year $22 million capital raising at 5c to fund completion of its Indee acquisition.

“We have … experienced a difficult period since the gold price highs in August and we have noted the declining share prices and fortunes of many of our peers in the sector,” Lill said.

“The decision to raise additional capital now was difficult, but ensures funding is secured and enables ongoing exploration activity at what we consider to be one of the best greenfields gold projects in Australia.”

The explorer is expected to release an updated resource estimate soon that is targeting an increase to around two million ounces, as it seeks to prove up 3Moz before considering its development options.

The new funds will be used for exploration within the Mallina gold province, where drilling has shown a series of wide, high-grade, shallow results with mineralisation now present over more than 7km of strike.

De Grey has drilled to less than 100m over less than 3km of the system, and plans a more systematic and comprehensive program.

A 10,000m RC and diamond drilling program is scheduled to be completed by mid-December.

The latest hits within the 160,700 ounce Mallina deposit show broad mineralisation, such as 56m at three grams per tonne from 14m, including 30m at 5.3gpt from 34m.

Mallina is the smallest of three focus deposits.

Meanwhile, at Toweranna, high-grade veins have been intersected 500m below the 356,000oz open pit resource, which is limited to 200m depth. Results include 6m at 9gpt from 300m including 2.2m at 22gpt.

A follow up program is likely to commence in February.

De Grey shares were last traded at 4.9c, valuing the company at $46 million.

De Grey shares have traded between 4.9-12.1c over the past year.

De Grey has spent around $10 million per annum in exploration over the past two years, with around $9 million in cash remaining.