Deccan Gold Mines is preparing for a significantly larger fund raise of up to Rs 500 crore to accelerate multiple mining and critical minerals projects across India and overseas, as the company positions itself to become a major gold and strategic minerals producer by 2030.
Rights issue utilisation
Speaking at the company’s earnings call, Deccan Gold Mines MD Hanuma Prasad said the proposed capital raise would primarily support the development of the Bhalukona Nickel-Copper-PGE project, expansion of the Kyrgyzstan gold project, and other global mineral assets.
The company had earlier raised about Rs 315 crore through a rights issue. According to Hanuma Prasad, a substantial portion of the proceeds, around Rs 219 crore — was used to repay debt, including dues to Hira Group and Godavari Power & Ispat.
Deccan Gold Mines also invested Rs 32 crore into its Kyrgyzstan project and earmarked another Rs 55 crore to maintain its strategic 26% stake in Geomysore Services through a rights issue.
“We took the decision to divert funds originally allotted for the Kyrgyzstan project and invested into the Geomysore rights issue. Maintaining the 26% stake was extremely important considering the strategic importance of the project,” Hanuma Prasad said.
Funding talks underway
The diversion of funds, however, created a funding gap for the Kyrgyzstan project. The company now requires between Rs 60 crore and Rs 100 crore to complete and commission the project.
Hanuma Prasad said discussions are underway with multiple investors, including key shareholders and promoter-group entities, for debt or equity funding. The company has also sought shareholder approval through an Extraordinary General Meeting (EGM) for related-party transactions to facilitate promoter participation in the funding exercise.
The company expects to commission the Kyrgyzstan project by July-end and formally inaugurate it in August.
Larger capital raise planned
Looking ahead, Deccan Gold Mines plans a much larger funding round once three milestones are achieved, commissioning of the Kyrgyzstan project, drilling results from the Bhalukona project, and exploration updates from the tungsten project in Spain.
According to the management, around Rs 400 crore to Rs 500 crore may be required to convert Bhalukona into a mining lease and establish a processing plant over the next year.
Vision for 2030
Hanuma Prasad outlined an ambitious roadmap for 2030, targeting gold production of one tonne per annum each from the Jonnagiri and Altyn Tor projects.
The company also aims to develop India’s first Nickel-Copper-PGE mine at Bhalukona and commence production from lithium, tantalum, copper and gold projects in Mozambique. Deccan Gold Mines is additionally exploring future production opportunities in Finland and Spain.
“With all these developments, by 2030 we expect to have two to three gold mines operating and a couple of critical mineral assets in production,” he said.
Defining quarter
Hanuma Prasad described the latest quarter as a “defining phase” for the company, highlighting its transition toward profitability and operational execution after years of delays and scepticism around India’s first private gold mining ventures.
He said the company had started reporting profits, while progress at the Bhalukona and Spain projects could potentially take Deccan Gold Mines to the “next level” in the coming years.