West-Africa-focused Semafo (SMF-T) plans to raise $40.5 million through a bought deal financing, the company reports.
Semafo will issue 17.85 million shares at $2.25 apiece, an 11% discount to today’s opening share price.
Semafo shares fell 9% on the news, or 22, to $2.31 per share on a trading volume of 7.3 million shares.
The deal, led by Thomas Weisel Partners Canada, has an over-allotment option to buy another nearly 2.7 million more shares at the same price, allowing Semafo to raise up to $46.6 million.
The company plans to spend the funds on exploration and plant expansion at the Mana gold mine in Burkina Faso.
Semafo declared commercial production at Mana during the second quarter of 2008. The company also has two other gold mines; Kiniero in Guinea and Samira Hill in Guinea. Total reserves for the three mines are 22 million tonnes grading 2.49 grams gold per tonne for 1.8 million oz. gold.
The company produced about 58,000 oz. gold in the first quarter of this year with 62% of production coming from the Mana mine. Cash costs were US$460 per oz. while net income was US$8.9 million.
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