Timmins-camp gold developer St. Andrew Goldfields (SAS-T) plans a consolidation of its shares and with it a $20-million financing to develop its projects.
The plan to consolidate down to 40.7 million shares from the present 813 million will be presented to shareholders at the company’s annual meeting on June 14. St. Andrew shares currently trade in the 15 range.
The company is also looking to raise $20 million for working capital and project requirements at both its Timmins-area properties and the Nixon Fork gold project in Alaska. St. Andrew previously closed a $6-million flow-through share financing for work on its Canadian exploration program, and has a $9-million loan from an inside party to keep current projects going.
The lender has already agreed to participate in a new financing, in effect taking shares as repayment of the loan. That would still have to be approved by regulators.
St. Andrews’ Clavos mine northeast of Timmins started limited production in January, and shipped 22,517 tonnes of ore to the nearby Stock mill in the first quarter of 2006. The mill poured 4,267 oz. gold in the quarter. Development of working areas and the ramp is continuing.
Cash production costs at Clavos in the quarter ran to US$710 per oz., with realized prices at US$555.
A 1,620-metre decline on the Taylor project, also near the Stock mill, should be started some time in the summer, and is scheduled to advance 120 metres by year-end. Underground drilling should also have started on Taylor by then.
St. Andrew also recently closed its purchase of the Aquarius gold project, near Night Hawk Lake, from Kinross Gold (K-T, KGC-N). Kinross holds about 12% of St. Andrews’ shares in exchange for Aquarius.
At Nixon Fork, permits to re-start mining are in place, and the mill is being modified to handle both mined ore and the tailings from previous operation at Nixon Fork. Mining, at 150 tonnes per day, should start late in the summer, for production of 20,000 oz. by the end of 2006.
St. Andrew lost $3.3 million on revenues of $3.8 million in the first quarter.
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