Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.
Mining companies appear to be having an easier time attracting investors recently – particularly if they have a gold or iron ore project. Both commodities have been hot, hot, hot the past year, and developers are prospering.
Labrador Iron Mines Holdings of Toronto has arranged at $30-million bought deal public equity financing. The company calls itself “Canada’s newest iron ore producer” having begun production at its James direct shipping ore iron mine earlier this year. Now LIM will issue 30 million common share at a price of $1.00 each. The deal is underwritten by Canaccord Genuity that is also entitled to an overallotment of 4.5 million shares. The net proceeds are to used for working capital and general corporate purposes.
Premier Gold Mines of Thunder Bay, ON, has arranged a $58.5 million deal consisting of a bought deal public offering and flow-through shares. The company has a number of active exploration projects in Ontario and Nevada. A syndicate of underwriters led by RBC Capital Markets has agreed to purchase 6.58 million common shares at $6.08 each plus 2.61 million flow-through shares at $7.08 each. The underwriters have been granted an overallotment option of 15%. Premier will use the net proceeds of the flow-through shares on its Canadian projects; the balance could be spent in the United States.
Dwarfing the previous two deals, Torex Gold Resources of Toronto has set out to make a $350 million bought deal financing to fund the development of its Morelos gold project in Guerrero, Mexico. The offering consists of 175 million units, each unit consisting of one common share and one-quarter of a common share purchased warrant, priced at $2.00 per unit.
The underwriters, led by BMO Capital Markets, have an overallotment option of 15%. Torex is working toward a mine and mill with an output of 235,000 oz/year.
These are but three of the five or six financing announcements that cross our desk every week. If juniors can attract investment, we take it as a sign that the Canadian economy is at least steady, perhaps growing a bit. Better yet, new deposits will be discovered, eventually to become profitable producers.