Hana arranges $21-M financing

A little more than a week after announcing it had significantly increased its resource at the Ghanzi copper-silver project in northwestern Botswana, Hana Mining (HMG-V) is raising $21 million in a private placement with a syndicate of underwriters co-led by Cormark Securities, Raymond James and Canaccord Financial.

The bought-deal financing involves 10 million Hana shares at $2.10 per share. The underwriters also have the option to buy another 1.5 million shares at the same price for additional gross proceeds of up to $3.15 million.

On April 21, Hana unveiled an updated resource estimate that expanded its Banana zone in the inferred category by about 80% to 73.5 million tonnes grading 1.47% copper (up from 40.6 million tonnes in a June 2009 resource estimate).

In a note to clients on April 22, Raymond James’ analyst Tom Meyers said that about 50% of the strike length in the Banana zone has been drilled so far and that “recent work confirms (the) predictability of the mineralization, implying that there is room to almost double the resource from present levels.”

If the Chalcocite zone is included, Ghanzi has a total inferred resource of 176.8 million tonnes grading 1.02% copper and 10.38 grams silver per tonne.

Meyers also noted that while the Chalcocite zone has a lower grade resource than the Banana zone, it may “potentially have a lower stripping ratio and possibly be amenable” to a bulk-tonnage, heap-leachable solvent extraction-electrowinning (SX/EW) processing route.

“The potential to use low capital intensity SX/EW improves the flexibility and lowers the risk of the overall project in our view,” he continued. “We expect this 860 million lb. of contained copper opportunity (in the Chalcocite zone), to continue to grow with further drilling.”

Meyers has a six to 12 month target price on the stock of $3.75 per share. At presstime in Toronto, Hana’s share price was $2.15, trading within a 52-week range of 27.5¢- $2.57. The company has 61.2 million shares outstanding.