Gibraltar funding

Following up previously announced expansion plans, Gibraltar Mines (TSE) has entered an underwriting agreement to raise $40 million.

In a “bought deal,” brokers Midland Walwyn Capital, Wood Gundy and Gordon Capital will purchase 8.9 million special warrants of Gibraltar at $4.50 each. Net proceeds, after an aggregate commission of $1.6 million, total $38.4 million.

Placer Dome (TSE), owner of about 68.1% of the company’s outstanding shares, agreed to buy an additional 1.9 million shares at the current price of $5.12 per share. This adds a further $10 million to the financing, for a total of $48.2 million.

Each special warrant is convertible into one common share at no additional cost. On completion of the financing, Placer’s interest will be diluted down to about 44.4%.

Gibraltar will use the funds to finance a potential 50% expansion of mill capacity at its open-pit copper mine near McLeese Lake, B.C., as well as to acquire and explore additional properties in North America.

It is completing a final feasibility study aimed at expanding mill capacity to 57,000 from 38,000 tons per day.