Viceroy to raise $8.4 million

Vancouver — Viceroy Resource‘s (VOY-T) shareholders have agreed to allow Calgary-based Propriety Industries (PPI-T) to make a private placement worth $8.4 million, giving Proprietary a 37% stake in the junior miner.

“This is a first step in Viceroy moving forward in its new strategic focus on exploration,” says Ronald Netolitzky, Viceroy’s chairman. “In addition to our inventory of gold projects, Viceroy will now seek new and diversified exploration opportunities.”

Proprietary will subscribe for 28 million units of Viceroy at a price of 30 per unit. Each unit will consist of one common share and one common share purchase warrant. Every two warrants will entitle the holder to purchase one common share for 35 for a period of two years.

Proprietary owns and manages a portfolio of financial, natural resource and real estate assets.

So far this year, Viceroy has missed a total of $7.6 million (A$9.5 million) in debt payments for its acquisition of the Bounty mine. The company says it resolved to put the cash into the mine instead. Under the terms of the loan agreement, NM Rothschild and Sons may demand immediate and full payment of the debt.

Viceroy acquired the Bounty gold mine in 1999 from LionOre Mining International (LIM-T) for US$24.6 million in cash and shares. At the end of 1998, Bounty hosted proven and probable reserves of 2 million tonnes grading 5.17 grams per tonne, equivalent to 331,000 oz. The total resource weighed in at 8.8 million tonnes grading 3.92 grams, equivalent to 1.1 million contained ounces.

Bounty is an underground operation supplemented by smaller, lower-grade, open-pit deposits, with a carbon-in-leach plant capable of processing 750,000 tonnes per year.

Viceroy is on the lookout for a business partner to help exploit its interests in Australia, such as the development of the New Morning nickel deposit and extensive exploration in the vicinity of Bounty.

During 2000, the junior posted a $45-million (or 78-per-share) net loss on sales of $114.2 million. Contributing to the loss was a $30.6-million writedown on the Brewery Creek mine in the Yukon.