New York-based junior Capital Gold celebrated a watershed financing that paves the way for construction of its El Chanate mine in Sonora state, Mexico.
Denver-based Royal Gold is supplying the entire capital cost of the project, US$13.8 million, in return for a royalty on production, which is expected to average 50,000 oz. annually over five years from a reserve of 13 million tonnes grading 0.827 gram gold per tonne. Over the report period ending Dec. 2, Capital rocketed US13, or 45%, to US42, touching a 52-week high of US51 along the way, while Royal Gold rose US$2.42, or 12%, to US$23.19.
South African major Gold Fields jumped US79 to US$13.80 as J.P. Morgan Securities exercised its option to buy another 2.25 million Gold Fields shares at US$13 each following completion of a placement that, including the option, comprises 17.25 million shares valued at US$224 million, or 3.64% of the company. The market is also absorbing a recent deal between Gold Fields and black empowerment group Mvelaphanda Resources, which will see Mvela buy a 15% beneficial interest in the South African gold-mining assets of Gold Fields (including Beatrix, Driefontein and Kloof) for R4.1 billion (US$655 million). Under South African legislation, mining companies must transfer 15% of their domestic assets to blacks within five years and 26% within a decade.
Riding the silver wave, Coeur d’Alene Mines exploded US$1.20, or 27%, to US$5.58, touching a 3.5-year high of US$5.72 mid-week. The company recently redeemed the remaining outstanding US$4.6-million principal amount of its 9% senior convertible notes, due Feb. 26, 2007.
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