The money markets have been miserly for many juniors as of late. But if you are a gold producer – Detour Gold, Osisko Gold Royalties, Primero Mining or Richmont Mines – it seems as if investors can't wait to give you money.
Part of the gold miners' success comes on the heels of a rising price for the yellow metal. Gold topped US$1,300 an ounce earlier today (Jan. 21), the highest it has been in five months. But gold strength comes on the heels of the nose-diving oil price as it slips below US$50 a barrel. The two opposite price pressures probable have a great deal to do with renewed interest in gold.
Together Detour, Osisko, Primero and Richmont announced this week that together they are fattening their treasuries by a total of $450 million – and that money is earmarked for spending in Canada.
- Toronto's Detour Gold has arranged a C$141 million bought deal share offering with a syndicate of underwriters, and granted them an overallotment that may add C$21.1 million more. The money will be used to reduce corporate debt.
- Osisko Gold Royalties of Montreal expects to raise C$200 million through the private placement of 10.96 million special share purchase warrants. The funds are for "working capital and general corporate purposes." The deal will close one day after Osisko's acquisition of Virginia Mines next month.
- Primero Mining of Toronto has announced a US$75 million bought deal offering of 5.75% convertible unsecured subordinated debentures. The underwriters have also been offered a 15% overallotment. The company plans to use the money for capital expenditures at the Black Fox gold mine in Ontario, expansion of its San Dimas gold-silver mine in Mexico, and to repay part of the revolving credit facility.
- Richmont Mines of Montreal has increased the size of its recent bought deal equity financing to C$34 million, plus an overallotment is possible. The company has plans to redevelop its Island Gold gold mine in Ontario and lengthen its life.
So there it is – money for gold miners or those having recently sold a gold mine.
Not to be left out, Vancouver's Imperial Metals has arranged a $50 million credit facility (see below) as it puts the finishing touches on its Red Chris gold-copper mine in British Columbia.'
We'll keep an eye on financing for miners over the next few months. Knowing whether the available money goes mostly to gold producers or is spread out among other commodities might be interesting.
Late breaking – Romarco Minerals of Toronto just announced a C$300 million bough deal financing, plus a 15% overallotment. Most of the proceeds are to fund the Haile gold mine development in South Carolina. (It's a Canadian company if not a Canadian gold project.)
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