Equinox Minerals (EQN-T, EQXMF-O) has boosted the size of its recently announced bought deal financing, with a total of 75 million newly minted shares to be sold at $1.40 apiece.
The $105 million will go toward construction of the company’s Lumwana copper project, 65 km west of Solwezi, Zambia. Earlier on Thursday, the company said it had arranged an $84-million bought deal co-led by Sprott Securities, CIBC World Markets, and GMP Securities.
Equinox says some 35 million of the new shares will be resold to a strategic investor that approached the company about acquiring an equity interest. The shares would give that investor an 8.05% stake in Equinox.
The offering is scheduled to close by Sept. 15, pending regulatory approval.
Equinox recently increased Lumwana’s estimated preproduction capital costs by 39% to US$762 million. The new figure includes a maximum price guarantee on the construction of the project, and upfront financing for the whole mining fleet (the previous estimate did not include financing for the fleet). The increase also reflects a strengthening Zambian kwacha (the local currency) against the greenback.
The Lumwana project centers on the Malundwe and Chimiwungo pits, which together contain reserves of 321 million tonnes grading 0.73% copper. Another 417 million tonnes of inferred material runs 0.6% copper. The reserves are good enough to support 16 years of production.
Lumwana is expected to annually produce 150,000 tonnes of copper metal over its lifetime, with more than 188,000 tonnes coming in each of the first five years. Average life-of-mine operating cash costs are pegged at US70 per lb.
Commissioning at Lumwana is slated for the end of the first quarter of 2008.
After opening lower in Toronto following the news on Aug. 24, shares in Equinox rebounded to sit 2 pennies higher at $1.58 in late-morning trading. The company currently has around 359.3 million shares outstanding.
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