River Gold Mines (RIV-T) has completed a fully subscribed rights offering of 5.2 million units at $1.05 each for gross proceeds of about $5.5 million.
One unit comprises one common share and half a share purchase warrant. Each warrant is exercisable for one share at a price of $1.35 until October 31, 2002.
The proceeds are earmarked for the completion of shaft-sinking at the Eagle River mine, 50 km west of Wawa, Ont.
At last report, the shaft had advanced to 450 metres in depth. The total depth is set at 505 metres.
River expects the shaft to be completed this year and full hoisting service to follow in early 2002. The new shaft is expected to generate significant cost-savings.
Gold production for 2001 remains on target for 87,000 oz., with output in the recent second quarter exceeding 23,000 oz.
Mining at Eagle River has moved back into the 6 zone, where grades are significantly higher than average. Preliminary estimates for 2002 production are 75,000 oz. gold.
A portion of the proceeds will go toward repaying indebtedness and to improve working capital.
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