Northern Orion dilutes self for Alumbrera purchase

Northern Orion Explorations (NNO-T) is cranking up the printing press to fund its partial acquisition of the Bajo de la Alumbrera gold-copper mine in Argentina.

The Vancouver-based junior recently teamed with Wheaton River Minerals (WRM-T) to acquire BHP Billiton‘s (BHP-N) 25% stake in the project. Each must raise US$90 million, though US$50 million of the US$180-million total cost can be deferred until May 30, 2005, at a penalty equal to the London Interbank Offer Rate plus 2% (T.N.M., April 14/03).

Pending regulatory approval, Griffiths McBurney & Partners, BMO Nesbitt Burns and four subordinate firms shall attempt to sell US$70-US$80 million worth of Northern Orion common shares and warrants on a best-efforts basis. The amount requires the company to raise its authorized share capital, which is now limited to 500 million common shares and 100 million each of first and second preferred shares.

At presstime, Northern Orion had 223 million shares outstanding, or 324 million on a fully diluted basis. That’s 1.1 million more shares than were outstanding at the start of 2002, reflecting the issuance of shares in lieu of debt and the closing of private placements over the course of the year.