An underwriting commitment from Barclays Bank and Banque Paribas will help Dayton Mining (TSE) bring its Chilean gold project to production.
The two banks agreed to lend the company US$50 million, subject to satisfaction of gold-hedging and equity requirements.
Donald MacDonald, Dayton’s senior vice-president of finance, said the company plans to raise US$20-$25 million through an equity issue in the near future. The bank loan, combined with the equity issue, will provide Dayton with ample funds to cover the US$57-million capital cost of advancing the Andacollo project to production.
Proven and probable minable reserves are estimated at 30.7 million tons grading 0.035 oz. gold per ton at an overall stripping ratio of 1.45-to-1. The 14,000-ton-per-day, open-pit, heap-leach mine is expected to produce 125,000 oz. gold per year at a cash cost of US$172 per oz.
The company expects to start construction in June or July and be in production by the third or fourth quarter of 1995.
A higher-grade cap is expected to boost production in the first full year of operation to about 140,000 oz. at a cash cost of US$150 per oz. Dayton has 22 million shares outstanding, which increases to about 30 million on a fully diluted basis with the conversion of a $15-million convertible debenture.
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