Vancouver — Gold Reserve (GRZ-T, GRZ-X) has closed a US$164.2-million financing announced in early May, paving the way for construction to begin at its major holding, the Brisas gold-copper project in Venezuela’s Bolivar state.
Gold Reserve sold 12.8 million Class A shares at US$5.80 apiece as well as US$90 million worth of 5.5% senior subordinated convertible notes in its financing. Combined net proceeds are estimated to be US$154.8 million after underwriting fees and offering expenses.
An additional 1.92 million shares and US$13.5 million worth of convertible notes are still available through an over-allotment option valued at a further US$23.4 million.
Convertible notes were sold at US$1,000 per note with semi-annual cash interest of 5.5% per year. Each note is convertible into 132.626 common shares, representing an initial conversion price of US$7.54.
Brisas, a stone’s throw from Crystallex International’s (KRY-T, KRY-X) Las Cristinas gold project, has proven and probable reserves of 485 million tonnes grading 0.67 gram gold per tonne and 0.13% copper, about 10.4 million contained ounces gold and 1.3 billion lbs. copper.
The company has already spent in excess of $100 million on the project. Construction of the mine, which should take 30 months and roughly $638 million, was stalled until the country’s Environment Ministry approved the Brisas environmental and social impact assessment in late March, sending Gold Reserve’s share price to $7.75 from $5.10.
The mine is expected to operate for at least 18.5 years.
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