Bardoc Gold Ltd (ASX:BDC) has substantially de-risked its pathway to gold production at its namesake project near Kalgoorlie in Western Australia by completing a "transformational" $24 million institutional capital raising.
The share placement, which was strongly supported by Tier-1 Australian and global institutions and strategic investors, underpins the final leg of BDC’s transition to development and construction at its flagship 3.02 million-ounce Bardoc Gold Project.
As such, it will assist in definitive feasibility study (DFS) completion, final engineering and accelerated development and exploration.
The proceeds will increase Bardoc’s cash reserves to in excess of $35 million, allowing the company to advance its gold development strategy to the next level.
Chief executive officer Robert Ryan said the high level of demand from institutional investors for the placement reflected the strong appetite for advanced, high-quality gold assets in Australia at a time of continued record strength in the gold market.
“Landmark capital raising”
“This is a landmark capital raising for the company that will result in the introduction of a number of Tier-1 institutional and strategic investors to our registers.
“These are investors who are willing to follow their money and back us as we make the transition from explorer to developer to producer over the next 12-18 months.
“The success of this raising reflects the growing level of recognition within the market that Bardoc is one of the few advanced gold developers which is now ready to take the next step and become one of the next mid-tier gold producers on the ASX.”
The placement issue price of 7.8 cents per share represents a discount of 13.3% to the last closing price on July 3 and a 9.1% discount to the 5-day trading VWAP.
Development activities supported by the placement include the DFS, completion of front-end engineering and design (FEED) work and securing key long-lead items ahead of a Final Investment Decision (FID).
As well as this work, the placement will underpin ongoing high-impact drilling across multiple new exploration targets at the Bardoc project with the potential to increase the resource.
A project-wide mineral resource update is on-track for completion by the end of the current quarter while DFS and FEED studies continue to make strong progress, together with permitting and approvals, paving the way for a FID by the end of quarter two of 2021.
Continuation of strategy
Ryan said: “We see this next phase of activity as very much a continuation of the strategy we have been pursuing over the past three years.”
He said the three key elements of this comprised aggressive exploration to grow the resource base, selective and value-accretive acquisitions and mergers, and the completion of high-quality development studies to progress the Bardoc Gold Project towards production.
“As a result of this raising, Bardoc will have cash of more than $35 million, giving us the financial capacity and flexibility to rapidly advance the next stage of our multi-pronged growth strategy in the Kalgoorlie district,” the CEO said.
“We are already well advanced towards achieving these goals as a result of the strong pre-feasibility study announced in March this year.
“Additionally, with activity levels now ramping up across the company, investors can look forward to strong upcoming news-flow including a mineral resource update due later this quarter, regular updates on our DFS activities and, of course, intensifying exploration activity.”
This additional funding will facilitate an aggressive approach to unlocking the value of the company’s exploration and development pipeline outside the existing mine plan, with stepped-up drilling programs planned at Mayday North, North Kanowna Star and Vettersburg (Slug Hill) projects.
The placement will be undertaken within BDC’s existing placement capacity under the ASX Listing Rules with 138.37 million shares to be issued under Listing Rule 7.1A and 169.32 million shares under LR 7.1.
Accordingly, no shareholder approval will be required for the issue of placement shares.
Allotment of the shares is expected to occur on or around July 17, 2020.
Rawson Lewis and Curran & Co acted as joint lead managers to the placement with BurnVoir Corporate Finance advising the company.