Vancouver —
The financing, which consists of 20 million shares priced at $8 per share, was arranged by a syndicate led by GMP Securities.
With the Zinkgruvan mine now in its fold, South Atlantic is expected to produce more than 170 million lbs. zinc and 10 million lbs. copper in 2004. These projections also reflect the company’s 38% interest in the Storliden mine in Sweden.
Zinkgruvan has been operating since 1857, and last year produced 145 million lbs. zinc, 70 million lbs. lead, and 1.8 million oz. silver. The deepest ramp is 1 km, and the mill was modernized in 1998.
The mine life had been estimated at 19 years, but the company now believes the resource can be expanded. Proven and probable reserves stand at 9.5 million tonnes grading 9.8% zinc, 4.8% lead and 97 grams silver per tonne. The total measured, indicated and inferred figure is 10.4 million tonnes averaging 9.7% zinc, 3.9% lead and 94 grams silver.
The company’s exploration efforts are focused on the Norrbotten property in northern Sweden, where drilling has been testing the extent of copper-gold mineralization. Most of the holes drilled on the Rakkurijarvi discovery, an iron-oxide copper-gold zone, returned significant intersections. In particular, hole 023 cut 48.5 metres grading 1.07% copper and 0.27 gram gold per tonne at a downhole depth of 75.5 metres.
Shares in South Atlantic were up 55, or 7%, and closed at $8.55 on the news. The company will vote to change its name to the Lundin Group at its annual general meeting in June.
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