The Dacian Gold Ltd (ASX: DCN) share price is in reverse today following the completion of its fully underwritten placement.
During afternoon trading, the gold miner's shares are down 4.92% to 29 cents. In comparison, the All Ordinaries Index (ASX: XAO) is up 0.38% at 7,359 points.
Details of the placement
Investors are fleeing today as the company is set to add more shares to its registry, diluting shareholder value.
According to its announcement, Dacian advised it has successfully completed its fully underwritten two-tranche institutional placement of $40 million. The offer received strong support from both existing and new domestic and international investors.
The placement sees approximately 142.9 million ordinary shares issued at a price of 28 cents apiece.
The funds raised will be put towards a number of company initiatives to drive its growth strategy. These include:
- Accelerating a 300-kilometre drill program across Mt Morgans and Redcliffe, targeting new base load opportunities
- Advancing the high-grade Redcliffe deposits into production
- Re-starting underground production from the Greater Westralia Mining Area
- Funding general working capital.
Dacian managing director Leigh Junk commented:
We are very pleased with the equity raising result and thank our existing shareholders for their ongoing support and welcome the new shareholders to the register. Dacian looks forward to pursuing its three-pillar growth strategy, focused on exploration success and advancing further deposits into production.
In addition to the completed placement, Dacian launched a Share Purchase Plan (SPP) for eligible investors. The SPP will be offered on the same terms as the placement, and will seek to raise $5 million.
About the Dacian share price
It has been a rollercoaster ride for Dacian shareholders. The Dacian share price hit a 52-week high of 56.5 cents in early January following positive results from its phase 2 drilling campaign at McKenzie Well, but its shares have lost more than 36% year to date.
At the current share price, Dacian has a market capitalisation of roughly $235 million, with around 811 million shares outstanding.
