Capital Raising To Help Fund Borborema Gold Development
Big River Gold Ltd (ASX: BRV) has successfully completed a two tranche placement to raise A$20.4M to be used to advance the development and construction of the company’s 100%-owned 2.43Moz Borborema Gold Project in north-east Brazil.
There company registered very strong demand for the Placement from a number of Australian and international institutional and sophisticated resource investors, including an A$8 million cornerstone investment from highly experienced Canadian-based resource investor, Dundee Goodman Merchant Partners. Upon completion of the second tranche of the Placement Dundee Corporation will hold approximately 9.2% of the vompany’s issued ordinary shares.
Executive Chairman, Andrew Richards, said the significant support for the Placement demonstrates confidence in the investment proposition of the Borborema project and will strengthen the company’s profile in the local and international markets.
Dundee, Jett Capital Advisors LLC and Petra Capital acted as Joint Lead Managers and Joint Bookrunners to the Placement.
“We are delighted with the support for the placement and welcome a number of new Australian and offshore institutional investors to the register,” Mr Richards said.
“Dundee, a cornerstone investor to the placement, is a highly experienced investor in the resources sector with extensive experience in both gold and nickel operations. Following the completion of a thorough due-diligence process, Dundee share our view of the significant potential of the Borborema Gold Project.
“The funds raised in this placement will be used to advance the development and construction of Stage 1 operation at Borborema as well as review the optimal plant design in anticipation of a future expansion of the 2Mtpa Stage 1 operation.
“The Mineral Reserve at Borborema is currently 1.6 million ounces of which over half is outside of the currently planned Stage 1 operation. There are clear extensions to mineralisation down plunge (as yet untested by drilling) and down dip as demonstrated by the 566,000 ounce Inferred Resource immediately adjoining the defined Reserve. These could further improve the project economics if successfully converted in whole or part to at least Indicated Resource category.
“This injection of funds will not only accelerate the development of Borborema but greatly strengthen the Company’s balance sheet, shareholder register and Company profile in anticipation of finalising full project funding.”
Mr Richards said that while the Definitive Feasibility Studies (DFS) completed to date demonstrate the very robust and profitable economics of the proposed Stage 1 operation, the additional attraction of the Borborema Project for incoming investors is the long-term potential and scale of the Project beyond Stage 1 including:
- Extending the planned operation to mine the additional ~800,000 ounces gold Mineral Reserves that remain outside the current Stage 1 mine schedule;
- Exploration prospectivity and potential to upgrade, in whole or part, the 566,000 ounce Inferred Mineral Resource that exists immediately below and down dip of the currently defined Reserves, and
- The potential to significantly expand mine throughput above the initial 2Mtpa to better align the plant size with anticipated reserves, subject to water management and securing water supply.
“Consequently, the Placement provides the opportunity to bring engineering studies forward to modify and optimise the existing Stage 1 design so as to minimise disruption and downtime when transitioning to a Stage 2 expansion, should it be proven viable.
“Provision has been made in the revised total project capital cost of US$107M to accommodate changes in engineering as well as plant and infrastructure construction, pre-production and owners costs.”
