Civil and mining contractor NRW Holdings Limited today announced its commitment to the Gascoyne Resources’ capital raising program.
In the announcement dated 1 April 2019, NRW Holdings Limited (ASX: NWH) stated that it has agreed to sub-underwrite up to $5.3 million in relation to the entitlement offer of the Gascoyne Resources equity raising of up to ~$24.4 million. Gascoyne’s capital raising program comprises of ~$3.8 million placement and an underwritten ~$20.6 million entitlements issue.
NRW’s participation will reportedly be applied by a corresponding reduction in the amount of trade receivable owed by Gascoyne to NRW. In December 2018, NRW agreed to support Gascoyne through the provision of a $12 million loan facility which was to be repaid through instalments during the second half of the calendar year 2019.
It underscores NRW’s strong support for Gascoyne and its Dalgaranga Gold Project as Gascoyne has committed to utilise its Placement and Entitlement Offer proceeds in funding to strengthen its balance sheet as it advances its Dalgaranga Gold Project towards commercial production with lifting production forecast in the second half of 2019.
The entitlement offer announced by Gascoyne today includes the non-renounceable offer to subscribe for its new shares at the ratio of 4 Shares for every five 5 shares held by eligible shareholders on the record date of 8 April 2019 at the same issue price of $0.05 per new share to raise up to ~$20.6 million. Entitlement offer of Gascoyne will open on 10 April 2019 till the close date of 1 May 2019.
NRW is a mining contractor Dalgaranga Gold Project (DGP) which is located approximately 65km by road NW of Mt Magnet in the Murchison gold mining region of Western Australia and covers the majority of the Dalgaranga greenstone belt. The Project contained a pre-mining JORC Measured, Indicated and Inferred Resource of 31.1 Mt @ 1.3 g/t Au for 1,320,000 oz of contained gold, and a Proved and Probable Ore Reserve of 612,000 oz of gold, increased to 650,000 oz in mine pan update. On safety front, the project reportedly remains Lost Time Incident (LTI) free, since the commencement of construction activities in April 2017.
Post-production stabilisation at Dalgaranga, Gascoyne intends to target exploration of near mine, low stripping, oxide ore sources as it believes that this has the potential to both improve production in the next 24 months and extend the mine life.
NRW further confirmed that it has agreed and been compensated to extend commencement of repayments by six months as a senior lender to Gascoyne Resources with respect to A$12 million working capital facility provided by NRW Pty Ltd.
NWH is currently trading as its higher level with the stock price up 3.782% to trade at $2.470 on 1 April 2019 (1:21 PM AEST). The stock is trading at a price to earnings multiple of 15.970x with a market capitalisation of $894.62 million.
Over the past 12 months, NWH has witnessed a massive surge of 80.30% including an upside momentum of 47.37% in the past three months.
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