The market likes a good deal, and it signaled its approval of Gold Hawk Resoruces’ (GHK-V) latest asset sale by sending the junior miner’s shares up 11% in Toronto on Wednesday.
Driving the buying was word that the company will shed its remaining 15% stake in the Coricancah Mine in Peru to Belgium-based Nyrstar Holdings for US$4.4 million.
The deal follows through on a move made by Nyrstar back in November when it bought an 85% interest in the mine from Gold Hawk for $15 million.
At the time Coricancha had been on care-and-maintenances since May of 2008, but Nyrstar, which is the world’s largest zinc producer, has since managed to re-commission the mine and is in the midst of completing a new tailings facility.
The company is looking to ramp-up production to 20,000 oz. of gold, 1 million oz. of silver, and 5,000 tonnes of zinc in concentrate per year by the end of 2010.
Coricancha has been a producing mine for over 60 years. In its present-day configuration it hosts a 600-tonne per day ore processing facility that takes ore from an underground mine.
Gold Hawk says its interest in the mine would not have yielded any cashflows for at least three years because of its loan repayment schedule and capital expenditures it would be on the hook for.
The completion of the deal will leave Gold Hawk’s coffers filled with $19.3 million.
Blue Note Mining (BNT-V), which had been seeking to replace Gold Hawk’s board, announced on July 6 that it was rescinding its proposal and will now support the current board at a shareholders’ meeting in mid-August.
The reversal in its position came after Blue Note met with Gold Hawk’s board and became convinced that the current board would act in shareholder’s interest, Blue Note said in a statement.
In Toronto on July 7 Gold Hawk shares finished the day 11¢ higher at $1.12 on 103,000 shares traded, while Blue Note shares finished up in the same place they began, at 8¢ on 133,000 shares traded.
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