Eldorado raises $20 million

Vancouver — Eldorado Gold (ELD-T) has inked a deal with Sprott Securities for a private placement worth $20 million with an option for an additional $5 million. The money will be put toward, general corporate purposes, strengthening its balance sheet and its Brazilian and Turkish assets.

According to the agreement, Sprott Securities will purchase 47.6 million special warrants on an underwritten private placement basis, at a price of 42 per special warrant. Each special warrant will entitle the holder to acquire one common share without further payment. Sprott has the option to purchase an additional 11.9 million special warrants for an additional proceeds of $5 million. These warrants are exercisable at any time, in whole, ore in part, prior to the closing of the offering which is scheduled for February 13. The offering is still subject to necessary approvals.

The securities will not be offered or sold in the United States. Eldorado intends to file a prospectus in each Canadian province in which special warrants are sold to qualify the distribution of common shares upon the exercise of special warrants.

In consideration for underwriting the offering, Sprott Securities will receive a cash commission and compensation warrants equal to 10% of the number of special warrants issued and sold on the closing date. The comp options will be exercisable for one year form the receipt of the final prospectus at an exercise price of 49 per special warrant.

Eldorado continues to work on improving its Sao Bento gold mine operations in Brazil as well as the potential of the nearby Brumal gold property. In Turkey, the company is focusing its efforts on the Kisladag deposit. The mine design is based on a 10,000-tonne-per-day (3.4-million-tonne-per-year) operation and proven and probable reserves of 39.7 million tonnes grading 1.44 grams, or 1.8 million contained ounces, with a stripping ratio pegged at 0.51-to-1. Eldorado envisages an operation that would produce 103,600 oz. gold per year for 11.5 years at a cash operating cost of US$149 per oz. Initial capital is projected to be US$29.6 million with an internal rate of return of 32%.