Vancouver – As CGA Mining (CGA-T, CGAFF-O) ships its first gold from the Masbate project 350-km south of Manila in the Philippines, it is raising $17 million through a private placement.
CGA Mining will issue about 12.6 million shares at $1.35 apiece in the financing and says it will use proceeds as working capital in anticipation of full production at the Masbate project this June.
The private placement is CGA Mining’s second so far this year. In February CGA mining raised $25 million at $1.25 a share.
Remarkably, CGA Mining only acquired the Masbate project two years ago and is already nearing full production.
If all goes according to the project’s feasibility study, CGA Mining will soon be producing about 206,000-oz. gold a year at an estimated cash cost of US$307 per oz. gold.
At a 5% discount rate the project is projected to return a net present value of US$289.7 million with capital costs of US$119.5 million.
During the first two years of production CGA Mining plans on operating the Masbate project’s mill at 4-million tonnes per year and then ramp it up to 5-million tonnes per year for the remaining six years of the mine’s life. So far CGA Mining pegs Masbate’s indicated resource estimated at 57.8 million tonnes grading 1.55 grams gold per tonne.
In 2007 CGA Mining bought Thistle Mining’s interest in the project for US$51 million worth of cash and shares. That got it a 40% stake in Filminera Resources, which in turn owns the Masbate mineral tenements, and a 100% interest in Philippines Gold Processing and Refining.
The other 60% of Filminera is owned by Zoom Mineral Holdings of which CGA Mining also has a 40% stake. All told that gives CGA Mining a majority interest in Masbate.
CGA Mining’s share price fell 13¢ to $1.51 on news of the latest financing. The company has about 234 million shares outstanding.
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