Vancouver — Augusta Resource (AZC-T, AZC-X) has lined up a $37.5-million financing, with Japanese multinational Sumitomo (SSUMY-O) subscribing to 71% of the non- brokered private placement.
The financing will see Augusta sell more than 10.7 million shares at $3.50 apiece, almost a one-dollar premium over its trading price prior to the announcement.
Sumitomo will purchase 7.6 million shares, giving it an 8.7% interest in Augusta. Sumitomo described the investment as a “strategic partnership” for development of Augusta’s Rosemont copper-molybdenum project, in southern Arizona.
The remainder of the financing is being taken up by a pair of funds managed by private U.S. investment firm Harbinger Capital Partners. Harbinger will boost its interest in Augusta to 19.9% from 18.6%.
Currently in the late stage of a feasibility study, Augusta is advancing Rosemont towards planned open-pit development.
Measured and indicated resources at Rosemont stand at 67.6 million tonnes of oxide material grading 0.2% copper (using a 0.1% copper cutoff grade) plus 492.7 million tonnes of sulphide mineralization averaging 0.5% copper, 0.014% molybdenum and 4.1 grams silver per tonne with a 0.2% copper cutoff grade.
The proposed operation would see a 68,000-tonne-per-day milling rate producing about 250 million lbs. copper and 5 million lbs. molybdenum annually along with silver byproduct credits of up to 3 million oz.
“This financing arrangement will enable us to meet immediate project requirements for long-lead capital equipment, and fund working capital needs through to project financing at the end of our permitting process,” said Augusta president and CEO Gil Clausen.
Shares of Augusta rallied 22% on the financing news to post a 56 gain, closing at $3.10 apiece in TSX trading.
The company recently agreed to sell its Mount Hamilton and Shell projects in White Pine Cty., Nev., to Ivana Ventures (ANA-V, IVVEF-O) for US$6.5 million in cash and warrants.
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