Following the collapse of a funding deal with a Malaysian group for the Andacollo project earlier this year, Dayton Mining (TSE) has retained RBC Dominion Securities to assist in the evaluation of merger proposals.
Dayton stated that in recent months the company has received proposals and expressions of interest regarding its 100% owned Andacollo project in Chile from a number of gold mining companies.
Dayton reached an agreement with the Malaysian group last year, giving it the right to purchase a 25% interest in the Andacollo project by paying Dayton $11.3 million, providing a US$20 million line of credit and paying an additional $11.3 million out of its share of project cash flow. Wayne McClay, president of Dayton, noted that the agreement was dependent on Dayton securing bank financing for the balance of the estimated US$40 million capital cost by the end of 1992.
McClay said the company did not receive commitments for the financing until January and, as a result, the Malaysian company requested a restructuring of the original deal. With expressions of interest from a number of other groups, Dayton opted to seek a merger with another company rather than restructure the deal.
Proven and probable minable reserves at Andacollo were last estimated at about 30.7 million tons grading 0.035 oz. gold per ton.
Feasibility work on the property projects annual production exceeding 125,000 oz. gold at an average cash cost of about US$170 per oz.
Dayton has about 23.5 million shares outstanding on a fully diluted basis, and working capital of about $2 million.
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