Shares of Orla Mining (TSX: OLA) have plunged after Fairfax Financial Holdings (TSX: FFH, FFH.U) sold nearly half of its stock in the company at a below-market price.
The miner with Camino Rojo in central Mexico and Musselwhite in Ontario fell 11% on Friday and 1.5% more by mid-Monday to $16.84 apiece in Toronto, valuing the company at $5.72 billion (US$4.13 billion).
The partial divestment — 25 million shares at a price of $17.6435 per share for total proceeds of approximately $441.1 million — follows exits by Newmont (NYSE: NEM; TSX: NGT) and Agnico Eagle Mines (TSX: AEM; NYSE: AEM) in September. Agnico sold its 11% stake for $561 million and Newmont ended its 13% holding for $605 million.
Half sold
Toronto-based investor Fairfax had held 56.8 million shares or about 17% of those outstanding on a non-diluted basis. It now holds 9.4%. Orla closed last Thursday at $19.23.
Even so, like most gold miners, Orla’s shares have more than doubled this year amid record gold prices.
Orla’s Camino Rojo, comprising an open pit deposit and a developing underground mine, and Musselwhite, which it acquired from Newmont earlier this year, are forecast to produce 265,000-285,000 oz. of gold this year.
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