Deccan Gold rights issue oversubscribed

Firm had proposed to issue equity shares amounting to Rs 50 cr

Gold exploration firm Deccan Gold Mines Ltd on Friday said its rights issue has been oversubscribed over 1.3 times with total subscription of Rs 65.22 crore. The firm had proposed to issue equity shares amounting to Rs 50.33 crore.

The rights issue closed on October 30 with 29.6 million shares at a price of Rs 17 per share. The company is now in the process of finalising the basis of allotment.

"We are pleased with the outcome of the rights Issue. Its success shows the confidence by our shareholders in the company's long-term strategy. The money raised will help us focus on continued growth in the company through development of its projects. There is a lot of talk of gold imports contributing to India's current account deficit and the need therefore to develop India's gold mining industry to reduce our reliance on imports," Mr Sandeep Lakhwara, MD,DGML said.

"An added benefit will be that several hundred new jobs will be created in the rural areas where jobs are most needed, and ultimately hundreds of millions of rupees will pour into the states to establish gold processing facilities and mining operations. The locals in and around Ganajur where our company's Ganajur gold project is located are very keen for the project to commence as they can see the merits from the development of this project," he said.

The proceeds from the issue will be utilised for the development of the company's exploration business including Ganajur Gold Project in Karnataka. It is waiting execution of the mining lease from Karnataka.