Shore Gold lands whale with Newmont’s major investment

Vancouver – Shore Gold (SGF-V) has lined up a $100-million financing that will see Newmont Mining (NEM-N) take down about half the issue.

The bought-deal equity financing through a syndicate of underwriters, led by up-start Toronto investment bank Genuity Capital Markets, will see the sale of 18.2-million Shore Gold shares at $5.50 apiece. The underwriters have an option to an additional 3-million shares on the same terms up to 48-hours prior to closing.

Newmont has agreed to subscribe to 8.95 million shares of the offering and will purchase an additional 297,000 shares should the underwriters’ option be exercised. Following the financing, Newmont will own 9.9% of Shore Gold. The move represents the gold-giant’s first real foray into diamond territory.

The funds will be allocated towards ongoing exploration and development of the Starr Kimberlite project in Saskatchewan.

Investors jumped on the issue following the announcement, pushing Shore Gold’s stock up about a buck to the $7.00 level on very high volume of around 5 million shares.