Glamis builds acquisition war chest

Net proceeds of about $22 million from two recent financing arrangements will be used by Glamis Gold (NYSE) to fund the acquisition of gold properties and augment working capital.

James Billingsley, vice-president, was tight-lipped about specific acquisition plans but said the company is pursuing opportunities in Mexico and the Western U.S. “We have some irons in the fire, but, as you know, the fire can go out.”

Glamis prefers to pursue properties with potential for large reserves which can be mined via open-pit and heap-leached at a cash operating cost of US$200 or less per oz. Of particular interest are properties which can be brought into production in stages thereby avoiding large capital outlays at any one time.

The most recent agreement, with securities firm Loewen, Ondaatje, McCutcheon, involved placing 1.25 million shares at US$8.62 per share for total proceeds of US$10.78 million. In March, Glamis closed the sale by private placement of two million special warrants for proceeds of $11.25 million. Those funds are held in escrow pending the filing and clearance of a prospectus providing for the distribution of two million common shares.

Glamis and subsidiaries operate the Picacho and Rand gold mines in California. Construction of the Baltic mine is continuing. The new mine is expected to produce 40,000 oz. annually when fully operational and increase Glamis’ total 1994 production to more than 100,000 oz. gold.