Nevada Goldfields raises funds

A private placement of preferred shares through its major shareholder, Gwalia, was recently completed by Consolidated Nevada Goldfields (TSE).

The purchase price totalled US$300,000 for 545,455 series 1 preferred shares.

Consolidated Nevada Goldfields had originally planned to raise a minimum of US$1 million through the placement, with Gwalia funding the purchase through the private sale of a portion of its common share holdings.

Gwalia was unable to complete as large a sale as hoped, and as a result, the placement was scaled back.

The new preferred shares are entitled to cumulative, preference 3% cash dividends and are convertible into common shares on a 1-for-1 basis. Gwalia currently holds about 7.2 million common shares of the company or about 63% of its outstanding capital.

Consolidated Nevada raised additional funds through the realignment of its forward sales agreements.

The additional funds generated by the transactions will be used for construction and prestripping at the company’s Aurora mine.

Consolidated Nevada expects to begin prestripping on its new Aurora pit shortly as well as beginning construction on the expansion of the mill to 385 tons per day from 275 tons per day.

The cost of the mill expansion is estimated at about US$500,000 while the 550,000-ton prestripping will add a further US$500,000 to the cost. As of June 30, 1992, the company estimated open-pit reserves at about 438,000 tons grading 0.13 oz. gold at the Aurora operation.

Underground reserves at the mine add a further 55,000 tons grading 0.20 oz. gold to the total.