Cambior raises $41m

Shares in Montreal-based Cambior (CBJ-T) shot up 22, or more than 5%, to 4.40 in early trading in Toronto on Nov. 25 after the intermediate gold producer announced that it had raised $40.9 million.

The windfall resulted from the exercise of 13.5 million series B warrants, which allow the holder to buy one Cambior share for $3. The warrants expired on Nov. 24. Cambior says it now has 225.7 million shares outstanding.

Proceeds will be contribute to working capital.

In other news, shareholders of Ariane Gold (AGD-T) will soon vote on whether or not to accept Cambior’s merger offer. If approved, those shareholders would receive one Cambior share for every 2.91 Ariane shares tendered. Under the transaction, Cambior would issue 16.3 million shares.

Key to the deal is Ariane’s Camp Caiman gold project, 45 km southeast of the French Guiana capital city of Cayenne. Measured and indicated resources there total 10.4 million tonnes grading 2.9 grams gold per tonne, equivalent to 975,700 contained ounces gold. An additional 1.8 million tonnes of inferred material grade 3.2 grams gold.

Earlier this year, Ariane tabled a positive preliminary assessment of Camp Caiman. Prepared by U.K.-based CSMA Consultants and Australian-based Bateman Minerals, the assessment considered the feasibility of a 4,000-tonne-per-day open-pit mine from which 1.4 million tonnes of saprolite and oxide ore would be processed annually. In all, a minable resource of 1.2 million oz. gold would be targeted.

Processing would include semi-autogenous grinding, milling, gravity concentration of coarse gold, and cyanide agitation leaching, with gold recovery by carbon-in-pulp methods.

At an annual production rate of 96,421 oz. gold, and an average cash operating cost of US$172 per oz., the mine would deliver an internal rate of return of 24.1%. The estimate is based on a gold price of US$340 per oz.

Ariane has applied for a mining licence from the General Directorate for Energy & Raw Materials, and will advance the project to the full feasibility stage.

Cambior owns the Omai gold mine in nearby Guyana and the Rosebel gold project in neighbouring Suriname. Mining at the former is expected to wrap up in 2005, after 12 years of production. Rosebel is slated to start up in the first quarter of 2004, with annual output targeted at 269,000 oz. gold.

Ariane recently posted a wider third-quarter loss of $937,000 (or 2 per share), compared with a year-earlier loss of $582,000 (or 3 per share). During the first nine months of the year, the company earned $328,200 (or a penny a share), compared with a loss of $928,200 in the corresponding period last year.

At quarter’s end, Ariane had $5.8 million in cash and equivalents, with 44.1 million shares outstanding.

Shares of Ariane were trading 7, or 5% higher, in mid-afternoon trading in Toronto on Nov. 25.