Glamis closes $50 million financing

Reno-based Glamis Gold (GLG-N) has closed a $50-million bought deal earmarked for its Marigold Millennium project in Nevada.

The financing, arranged with Research Capital, BMO Nesbitt Burns, and National Bank Financial, saw the underwriters take down 8 million shares at $5 apiece. The underwriters also exercised an option to acquire another 2 million shares at the same price. In all $50 million in proceeds were generated.

Additionally, the underwriters, via an over-allotment option, can acquire up to another 1.5 million shares for 30 days after closing.

The net proceeds of the offering will be used to finance the costs of the Company’s Marigold Expansion Project in Nevada. The final feasibility study for the project will be completed in November 2001, and equipment purchases are expected to commence in the first quarter of 2002.

Proceeds will help fund an expansion of Glamis’ Marigold mine, 60 km southeast of Winnemucca, Nev., in which Homestake Mining (HM-N) owns a 33.3% interest. A US$45-million program to increase annual production to 150,000 oz. is at the feasibility-study stage.

A prefeasibility study pegged Marigold’s minable reserve at 45.3 million tonnes grading 1.13 grams gold per tonne, including the newly discovered Millennium deposit. The estimate’s economic cutoff is US$275 per oz. The Millennium resource remains open along strike to the north and south. The oxidized material would be amenable to heap leaching, as the currently mined Marigold ores are. All expansion designs have retained a basic open-pit mine and heap-leach recovery model. Gold recovery from the Millennium mineralization is comparable to that of the Marigold ores.

Following a positive feasibility study, additional production from the deposit’s Terry zone would gear up in 2002. Production from the Section 31 zone, which is yet to be permitted, could be under way in 2003.