Aber Resources (ABZ-T) has entered into a bought-deal financing with a syndicate of underwriters, led by Bunting Warburg, that will raise gross proceeds of $102.9 million. The deal involves 7 million of Aber’s shares at $14.70 each.
After closing, which is scheduled for June 2, Aber will have 45.5 million shares outstanding, or 48 million on a fully diluted basis.
The net proceeds will be used primarily for the development of the Diavik diamond project in the Lac de Gras region of the Northwest Territories. Aber holds a 40% interest in the joint-venture project, while the remaining 60% is held by operator Diavik Diamond Mines, a unit of London-based Rio Tinto (RTP-N).
A bankable feasibility study on what is expected to be Canada’s second diamond mine is scheduled to be completed in the latter part of 1998. Aber expects its share of the costs of feasibility work, exploration and permitting to total $18.4 million. As well, Aber will spend about $1.7 million in 1998 to cover its share of exploration costs on other projects.
Earlier this year, Diavik and Aber tabled mining plans for four kimberlite pipes and the construction of a 2-million-tonne-per-year processing plant at the Diavik site. The operation would yield 6 to 8 million carats of diamonds per year during full open-pit production. Its total mine life is expected to be 16 to 22 years. Capital costs for the mine are projected at $875 million.
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