Burey Gold Limited (ASX:BYR) has successfully completed a book build with RFC Ambrian to raise A$11.6m. This was done through the placement of 215m shares at A¢5.4/share, a discount of 8.5% to Burey’s five-day VWAP (the stock reopened for trading today and closed at A¢7.1). The placement was cornerstoned by two leading international resource funds in London and North America, with a number of other institutions in London and Australia also participating. It was significantly oversubscribed and maintains the extremely strong momentum we are seeing in the gold space after the Hummingbird placement of US$70m that RFC Ambrian closed a few weeks ago.
Burey’s management team of Klaus Eckhof, Susmit Shah and Mark Gasson now has a well-stocked warchest. It can use this to explore its 55%-owned Giro Gold Project in the DRC. The current focus is a significant drill programme at the Douze Match anomaly; the first assays from here were quite breathtaking, and are covered in detail in Jim Taylor and Imogen Whiteside’s piece Burey Gold — Stellar Assays from Douze Match, 24 June 2016.
These results included:
· Hole DM-RC003 — 15m grading 256 g/t from 15m (including 3m at 1,260 g/t and 3m at 14 g/t) and 2m at 196g/t from 12m
· Hole DM-RC004 — 12m grading 21 g/t (including 3m at 77 g/t)
· Hole DM-RC005 — 33m grading 6.1 g/t (including 3m at 35 g/t)
Commenting on the success of the placement, Burey Gold Limited Chairman Klaus Eckhof stated: “Institutional investment in Burey highlights the investor attention now being shown to the Giro Gold Project, which spans a 30km structural corridor in the Kilo-Moto Belt. With these placement funds Burey can truly commence uncovering the potential that so far we have been glimpsing at the cluster of prospects explored at Giro.”
“Our exploration programmes to date have seen relatively shallow, but successful, scout drilling. Soil anomalies and artisanal workings have been highly accurate as target finders, and now with targeted diamond drilling we can interpret and define the scale of Giro’s potential, where results so far have come from almost every hole we have drilled.”
RFC Ambrian Comments:
Burey will continue to publish drilling results over the next few weeks. We’ll keep a close eye on this and will provide updates on any developments here.
So, what is going on?
The macro picture for gold has looked better and better as the year has progressed, and we don’t need to highlight global economic uncertainties as the driving force for this. While the gold price has been nudging all-time highs in Australian and Canadian dollar terms, the commodity’s attractiveness to London institutions is also clear to see (both pre- and post-Brexit voting). While large institutions have done very well from holding gold production stocks, other commodity mining stocks have also performed extremely strongly during 2016. Pre-production gold was always going to be the next mover; despite the early-stage nature of Giro, Burey’s placement is a reflection of both the excellence of the grade and the quality of the management team, which has a strong history of delivery. These guys are regular, ahem, ‘Goldfingers’ and have a following in Australia that is now being replicated in London.
Giro is only 20-30km west of Randgold and AngloGold’s Kibali Project, which hosts some 17Moz of gold, with production of 642,720oz in 2015. Kibali was bought from Moto Gold Mines in 2009 for US$487m in cash and shares. At the time Moto had the same management team as that at Burey now, so it’s highly likely that it will look to develop Giro along much the same lines as Moto did at Kibali.
