An underwriting group lead by Burns Fry has made a firm commitment to buy 7.6 million special warrants of Dayton Mining (TSE) at $4.50 each for total proceeds of $34 million.
The financing paves the way for Dayton to begin construction at its Andacollo gold project in Chile. The capital cost of the 14,000-ton-per-day heap-leach mine is estimated at US$57 million and Dayton has already received an underwriting commitment from Barclays Bank and Banque Paribas for a US$50-million loan.
Each special warrant in the equity issue is exercisable into a unit consisting of one common share and half a warrant. A full warrant is exercisable at $5.25 in the first 12 months, increasing to $5.50 per share for a further six months.
Dayton expects to begin operations in the third or fourth quarter of 1995 and projects average yearly gold output at 125,000 oz. at a cash cost of US$172 per oz.
Proven and probable minable reserves at Andacollo are estimated at 30.7 million tons grading 0.035 oz. gold, with a stripping ratio of 1.45-to-1.
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