A planned private placement of special warrants is expected to net Hycroft Resources & Development (TSE) about $10.9 million before deducting issue expenses.
The placement includes 10.5 million special warrants priced at $1.04 each and exchangeable into an equal number of common shares. Hycroft plans to qualify the special warrants and corresponding shares for public distribution on or before July 15.
Granges (TSE) will purchase 2.65 million of the special warrants, effectively allowing its interest to dilute to 50.5% from the current 67%. Proceeds from the issue will be used to fund the purchase of a new and larger fleet of mobile equipment for the Crowfoot/ Lewis open-pit heap-leach mine in Nevada at an estimated cost of US$7.2 million.
The company expects to recover the cost of the new equipment within two years, primarily through savings in maintenance costs.
Hycroft received a new lease on life in 1992 with the discovery of additional reserves at its Crowfoot/Lewis mine. At the start of 1993, total proven and probable reserves stood at 44.96 million tons grading 0.021 oz. gold per ton, extending the mine life to 1998. Of the total reserve, 29.8 million tons is in the proven category.
Hycroft plans additional drilling this year to prove up reserves as well as to test a number of exploration targets on the property.
Hycroft mined a total of 6.2 million tons in 1992, producing more than 100,000 oz. gold and more than 323,000 oz. silver at a cash cost of about US$284 per oz. gold. Cash flow for the year, after taking into account changes in working capital, totaled $3.7 million.
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