Echo Bay funds Minefinders

A private placement will see Echo Bay Mines (ECO-T) subscribe for up to 2 million units of Minefinders (MFL-T). Each unit will consist of one share and a warrant entitling the purchase of one-third of an additional share.

Echo Bay, which is Minefinders’ principal shareholder, will purchase the units by using proceeds from the concurrent sale of an equivalent number of shares from its existing shareholdings in Minefinders. Upon completion of the arranged financing, Echo Bay’s diluted ownership in Minefinders will remain the same. Echo Bay currently holds a 24.9% interest. An additional 250,000 units in the private placement may be sold to other purchasers.

The purchase price of the units and the exercise price of the warrants will be the same as the price Echo Bay receives from the sale of its Minefinders shares. Minefinders has recently been trading between $1.50 and $1.42 in a 52-week range of $2.65 to 80 cents.

The proceeds will be used to begin final feasibility drilling on the company’s wholly owned Dolores gold-silver project in the northern Mexican state of Chihuahua. A scoping study by Mineral Resource Development Inc. shows the economic potential for an open-pit, heap-leach mine. The project hosts an indicated and inferred resource of 61 million tonnes grading 0.83 gram gold and 44.05 grams silver, equivalent to 1.6 million contained ounces gold and 86.3 million contained ounces silver.