Gold producers cash up (October 18, 2004)

Large bought-deal financings have cashed up two junior gold producers, Rio Narcea Gold Mines (RNG-T) and High River Gold (HRG-T).

Rio Narcea will issue 21 million units at $3.10 to raise just over $65 million. Each unit consists of a share plus half a warrant; one warrant is exercisable at $5 until September 2008. Other warrants in the same series have already been issued and trade on the Toronto Stock Exchange.

The underwriters, a syndicate led by BMO Nesbitt Burns, have an option to purchase just over 3 million more units up to a day before the offering closes. Closing is scheduled for Oct. 25.

High River will raise $50 million from an underwriting led by Sprott Securities and Dundee Securities. A syndicate of five investment houses will buy just over 27 million units at $1.85, with each unit consisting of a High River share and half a warrant to buy a share at $2.35. The warrants expire two years after closing, scheduled for Oct. 26.

There is an option for the underwriters to buy 5.4 million more units before the closing date.