Corrs acts in $98m raising

Corrs Chambers Westgarth was the legal counsel to Dacian Gold on its $98m raising.

The raising has made Dacian one of the first ASX-listed mining companies to use the temporary class waiver implemented by the ASX. Launched late last month, the waiver aims to help companies raise resources amid the COVID-19 pandemic.

“We worked closely with Dacian to deliver on its recapitalisation proposal, seeking to structure a transaction that was best suited to the current challenging environment. Specifically, Dacian needed a transaction structure that would provide as much funding certainty as possible despite the current market volatility, while also providing its existing shareholders with an opportunity to participate at the same price as that offered to institutional investors,” said Corrs lead partner Russel Philip. “This was done against a backdrop of seeking to re-position the company following recent revisions to its resource estimate and production guidance.”

The raising was conducted through a placement to institutional and sophisticated investors, as well as a pro-rata non-renounceable entitlement offer, Corrs said.

“We advised Dacian on an accelerated fundraising structure which allowed it to raise a large proportion of the funding within a condensed timeframe and ultimately minimise the period Dacian was exposed to market uncertainty. The transaction was complicated due to the need to issue a prospectus in connection with the capital raising as a result of trading in Dacian shares being in suspension,” Philip said.

Corrs said that the raising allows Dacian to de-leverage its balance sheet and reposition the company in its pursuit of a simplified open-pit plan that prioritises low-risk, high-margin gold production.

The company’s de-leveraged balance sheet and new corporate strategy is expected to reduce operational and financial risk while positioning the company to deliver on a revised three-year production outlook, Corrs said.

Corrs said that the placement and institutional component of the raising has successfully raised about $70m. The retail component, which is on track to raise $28m, is expected to close on 1 May.

Corrs recently confirmed that it recently acted on transactions that raised about $450m for clients. The deals show the value of clients understanding what options are available to them as they respond to the coronavirus crisis, the firm said.