To fund construction at the Santa Rosa gold project in Panama, Greenstone Resources (TSE) has entered an agreement with an underwriting group to raise $13.5-18 million.
The group, led by Nesbitt Thomson, will sell 6-8 million special warrants by private placement. Each special warrant will be offered at $2.25 and consist of one common share and half a purchase warrant. A full purchase warrant will entitle the holder to acquire one common share at $2.65 for 16 months after the final prospectus is cleared.
If the maximum issue is subscribed, Greenstone will have 25.4 million shares outstanding. The subsequent exercise of all the purchase warrants would result in a further four million shares being issued for additional proceeds of $10.6 million.
Net proceeds from the offering will provide the US$12 million required to begin construction at Santa Rosa, which contains 9.9 million tons (proven and probable) at 0.044 tons gold per ton.
Mining and leach pad stacking are to begin in the second quarter of 1994, with gold sales starting in the fourth. Full production of 60,000 oz. gold per year will be reached in 1996, with cash costs estimated at US$200 per oz. Working capital will be funded through debt financing.
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