Vancouver – After recently cancelling a planned private placement citing dilution concerns, Jinshan Gold Mines (JIN-T, JINFF-O) has closed a $20-million debt financing to further fund its Chinese exploration effort.
The financing was comprised of 20,000 units priced at $1,000 apiece with each unit consisting of one promissory note and 200 transferable warrants. Notes have a $1,000 par value and pay 12% interest per annum, to be paid quarterly over three years at which time they mature and are repayable.
The warrants will be exercisable at $2.50 per share for two years but have an acceleration clause following 18 months if Jinshans shares trade at or above a volume weighted average price of $4.30 for 20 consecutive trading days.
Haywood Securities sold 12,500 of the units and pocketed 4% ($500,000) of the gross proceeds of its portion for the effort. Jinshans senior sister company Ivanhoe Mines (IVN-T, IVN-N) took down the remaining 7,500 units.
In early June, Jinshan cancelled a planned equity financing on concerns it would be dilutive to its share capital with its stock trading below the $2.00-level.
The companys Chang Shan Hao (CSH 217) open-pit gold mine is poised to commence commercial gold production in July 2007 at an initial targeted production rate of 117,000 oz. gold per year. Operations will be focused on proven and probable reserves of 66.7 million tonnes grading 0.75 gram gold per tonne in the Northeast zone open pit model.
Jinshan recently engaged an engineering study to boost the mines output to 180,000 oz. annually. The study will look to incorporate the Southwest zones measured and indicated resource of about 32 million tonnes at 0.86 gram gold into the mining plan.
Shares of Jinshan have recently traded at the $1.90-level.
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