De Grey shares drop after $300m fund raising

The news: Shares in gold explorer De Grey Mining have opened lower on resuming trading following a halt for a $300 million raising.

The numbers: De Grey shares were trading 4% lower at $1.07 in early trading on the ASX. Earlier on Monday, the company said it had completed a $300 million share placement to investors at $1.05 each, a 5.8% discount to its last close of $1.115 a share.

The context: De Grey said the proceeds will be used for the ongoing development of the Hemi gold project in Western Australia at a cost of nearly $1.3 billion, which is expected to be among the five biggest gold mines in the country. The company said major shareholder Gold Road Resources had also participated in the raising and lifted its stake to 19.9%. Construction at the project is expected to start in the second half of 2024, with first gold production likely in 2026.