Aura Minerals (ORA-T) is raising $100.1 million in a bought deal financing to help pay for three Latin American gold mines it’s buying from Yamana Gold (YRI-T, AUY-N, YAU-L).
Aura will issue 182 million subscription receipts at 55 apiece to a syndicate of underwriters led by Canaccord Capital. The group will have the option to buy another $25 million in subscription receipts at the same price.
Aura announced last week that it had agreed to buy the San Andres gold mine in Honduras and the Sao Francisco and Sao Vicente gold mines in Brazil from Yamana for US$200 million — US$90 million in cash, US$70 million in deferred cash payments and US$40 million in Aura shares issued at 40 apiece. Yamana will also receive a cash flow-based royalty that could provide Yamana with up to US$40 million, depending on net free cash flow above certain milestones.
The transaction will turn Aura, a base metals development company, into a gold producer with annual production of 220,000 oz. gold at a cash cost of US$555 per oz.
Each receipts converts to one share and will be held in escrow until just before the closing of the first stage of the deal – the San Andres acquisition – which is expected to happen by July 23. Shares will be subject to a four-month holding period.
In total, Aura will be issuing more than 337 million shares, or about 57% of the company’s current 593 million shares outstanding.
Once the San Andres San Andres deal is complete, Aura says it plans to do a five-for-one share consolidation.
Aura expects to close the second stage of the acquisition – the Sao Francisco and Sao Vicente mines – within six months.
Aura shares were trading at 62 today on a trading volume of 1.7 million at lunchtime.
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