Newly minted gold miner Dacian Gold has announced a US$27 ($37) million capital raising to ramp-up exploration at its Mt Morgans gold project near Laverton.

The Rohan Williams-led miner announced the institutional placement just days after achieving output guidance in its first full quarter of production at Mt Morgans.

Dacian said the cash raised would be spend accelerating exploration at its Westralia mine and its promising Cameron Well prospect, which is emerging as a potential third mining centre at Mt Morgans.

The company would also spend US$8.9 ($12) million of the cash raised in extinguishing a life-of-mine royalty arrangement around its Jupiter operation.

Dacian said it would have the ability to accept US$2.23 ($3) million in oversubscriptions in the placement and would also raise an extra US$3.71 ($5) million via a parallel share placement.

Both would be priced at US$2 ($2.70) a share, a 10.3 per cent discount to the company’s last traded price of US$2.23 ($3.01) yesterday.

Executive Chairman Rohan Williams said the raising provided shareholders with an opportunity to capitalise on recent advances made on the exploration front at Mt Morgans.

“We are also pleased to be able to cancel the Jupiter life-of-mine production royalty with proceeds of this equity raising,” he said.

“This will allow the operations to generate more cash that provides added benefit to shareholders.”

The raising comes after Dacian last week announced production of 34,155 ounces in the June quarter, easily meeting maiden guidance of 30,000-40,000 ounces for the first quarter of production at Mt Morgans.