Vancouver — Dundee Precious Metals (DPM-T, DPMLF-O) has $74 million in the bank after closing a bought-deal financing.
The brokered deal involved the sale of 4.8 million units at $10.50 apiece, raising $50.4 million, and almost 2 million flow-through shares at $12.25 per share for proceeds of $24 million. Units are comprised of a share plus a half-warrant with each full warrant exercisable at $15 for five years.
Dundee has earmarked funds from the units offering for general corporate purposes while proceeds from the flow-through offering will be allocated to its Back River gold project in Nunavut.
The company acquired 60% of Back River in February 2005 and boosted its interest to 100% last year. The 390-sq.-km Back River project contains an indicated resource of 4.3 million tonnes grading 9.8 grams gold and 9.9 grams silver per tonne.
Dundee also owns two properties in Bulgaria. The Chelopech gold-copper mine, 70 km east of the capital city, Sofia, was running with recurring financial losses when Dundee acquired it in 2003. The company was able to boost metal production by increasing tonnage throughput and recoveries.
Dundee is planning to increase production to 2 million tonnes annually, from a current level of just below 1 million tonnes. In 2006, the mine produced 25.4 million lbs. copper and 70,781 oz. gold.
Dundee’s other Bulgarian property is Krumovgrad, which holds proven and probable reserves of 4.9 million tonnes grading 5.08 grams gold and 2.66 grams silver. The company completed a feasibility study and is ramping up to mine construction.
Dundee’s stumbling block in Bulgaria, however, is Dzhevdet Chakarov, the Minister of Environment and Waters, who has refused to sign two separate permits. One is needed for the expansion of the Chelopech mine, the other, for the construction of a mine at Krumovgrad.
Dundee also holds an 80% interest in the producing Kapan copper-gold-zinc mine in Armenia, and in Serbia, a dozen concessions or licences with plans to invest up to $17.8 million this year in exploration.
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