Vancouver — In a move to bolster the treasury as its Max molybdenum mine advances to production, Roca Mines (ROK-V, ROCAF-O) has arranged a $13-million bought-deal financing.
An underwriting syndicate, led by Desjardins Securities, has agreed to purchase 4.09 million units of Roca at $3.18 apiece. Units will consist of a share plus half a warrant with full warrants exercisable at $4.00 for two years. The brokers also have also been granted an overallotment option to buy another 15% of the offering.
For its work, the underwriting group will get 6% of the gross proceeds plus broker warrants equal to 6% of the units sold through the offering. Broker warrants will be exercisable at $3.19 for one year.
Roca expects the financing to close by the beginning of August.
The funds are being allocated to its Max molybdenum mine, located 60 km southeast of Revelstoke, B.C., where initial production is anticipated by late August.
The company reports underground development is progressing with ore zones being prepared for mining. All the processing equipment (including a 1,000-tonne-per-day mill) is installed.
Mineralization in the pipe-like Max deposit consists of molybdenite (MoS2) associated with a granodiorite intrusive. The molybdenite occurs mostly within quartz stockworks, but also as disseminations in the intrusive.
A measured and indicated resource of 42.9 million tonnes grading 0.2% MoS2 has been tabled for the deposit, using a 0.1% MoS2 cutoff grade.
Roca intends to initially target the high-grade HG zone, about 260,000 tonnes of 1.95% MoS2, and produce a concentrate of about 95% MoS2.
The deposit was previously evaluated by a Newmont Mining (NMC-T, NEM-N) and Esso Minerals joint venture in the late 1970s and early 1980s, and included some underground development. In 1982, the pair suspended operations, deciding not to advance the project due to a weak molybdenum price and market outlook.
The molybdenum price has recently risen to the US$35-per-lb. level after spending most of 2006 around US$25 per lb. The metal’s price increased significantly through 2004, from around US$5 per lb. to US$40 per lb. in mid-2005.
Molybdenum is principally used as a hardening and anti-corrosion alloy in stainless and specialty steels.
Shares of Roca have recently risen to new highs at around $3.70, giving the soon-to-be molybdenum miner a $278-million market capitalization based on its 75 million shares outstanding.
Be the first to comment on "Roca lines up $13M financing"