Rio Alto Mining (RIO-V, RIOAF-O) is raising $50 million in a private placement to fund its La Arena copper-gold project, 480 km northwest of Lima in Peru.
A syndicate of underwriters led by GMP Securities and including Scotia Capital, Clarus Securities and Stonecap Securities will purchase 24.4 million Rio Alto shares at $2.05 per share on a bought-deal basis.
The underwriters have an over-allotment option to buy an additional 3.6 million shares at the offering price within 48 hours of the closing date. If the option is exercised in full, Rio Alto will raise an additional $7.5 million for total proceeds of $57.5 million.
The majority of the funds will go to advance the La Arena gold oxide project where construction started in August 2010 following the approval of an Environmental Impact study.
Run-of-mine ore is planned to be loaded onto the pad in January with irrigation starting in February. Commissioning of the processing plant will begin in March and gold doré production is scheduled for late April.
So far 100% of the earthworks related to the construction of the 9-hectare run-of-mine Pad 1A have been completed. Seventy percent of the pad has been lined with geomembrane.
La Arena is a low-grade porphyry project that contains 2.8 million ounces gold and 1.7 billion pounds copper in indicated resources with additional inferred resources of 1.2 million ounces gold and 1.2 billion pounds copper.
Mining at La Arena will be based on a conventional truck and shovel, open-pit mine design with run of mine dump leaching of gold oxide material during the first seven years of production. The copper/gold sulphide material would be mined from an open-pit and be treated by milling, flotation, and sulphide concentration of the copper/gold during years 4 to 25.
Barrick Gold‘s (ABX-T, ABX-N) Lagunas Norte Mine is 15 km west of La Arena while Newmont Mining‘s (NMC-T, NEM-N) Yanacocha mine is 100 km to the north.
The project can be accessed by a 160 km national roadway from the coastal city of Trujillo directly east towards Huamachuco, passing through Chiran, Shorey/Quiruvilca and Barrick’s Alto Chicama project.
Rio Alto was trading at $2.18 per share at presstime in Toronto. Over the last year the stock has traded in a range of 34¢-$2.34.
Be the first to comment on "Rio Alto to raise $50 million for La Arena"