Dayton raises $3 million for Chilean Andacollo gold project

Vancouver-based Dayton Developments (TSE) has successfully completed a private placement of convertible subordinate notes for net proceeds of $3,023,000. Proceeds from the placement will be used to continue development of Dayton’s 100% owned Andacollo gold project in central Chile.

San Francisco-based Bechtel Corp. is completing a final feasibility study for the first phase of a 12,000-ton-per-day heap leach operation at Andacollo.

The notes, convertible into 2,114,000 shares, were placed with various Canadian, U.S., and European institutions and private investors. Dayton has about 18.6 million shares issued and outstanding on a fully diluted basis.

The company says it has already ordered equipment with long lead times such as crushers in anticipation of a positive feasibility study. That move is designed to shorten the mine’s construction period, Dayton said.

Open pit reserves for the Andacollo property were last reported at around 9.8 million tons of 0.038 oz. gold per ton (proven), 21.8 million tons of 0.035 oz. (probable) and 11.2 million tons of 0.035 oz. (possible).

The company recently decided to increase the scope of Bechtel’s study to include additional high- grade reserves which have been outlined by the current drilling.

With the addition of these higher- grade reserves, Dayton expects the first phase of annual gold production at Andacollo to exceed 110,000 oz. of gold at an average operating cost of around $200 per oz.

Final production estimates will be subject to the Bechtel study which is expected to reach completion by mid-February, the company said.