The sale would consist of 33-42 million shares, based on the company’s closing share price of $1.97 in Toronto on April 4, the day of the announcement. Ivernia currently has 68.1 million shares outstanding.
Ivernia can acquire the 49% stake, currently held by
Also under the deal, Ivernia acquires the vendor’s share of US$39.8 million worth of development loans.
At last count, proven and probable reserves at Magellan amounted to 16.2 million tonnes grading 6.2% lead, based on a cutoff grade of 3% lead. There were also 13 million tonnes at 4.3% lead in the inferred category.
Ivernia recently launched a A$1.2-million drilling program designed to upgrade inferred resources to the indicated category. New reserve and resource estimates are expected by mid-year.
In 2006, Magellan is expected to process 1.4 million tonnes of ore, from which will be extracted 100,000 tonnes of lead-in-concentrate.
The project comprises the shallow Cano and Magellan open pits. The Cano deposit will be mined first, as its ore is readily accessible.
Initially, lead-in-concentrate will be shipped from the concentrator to offshore smelters. During the second phase, in 2006, a planned refinery will produce a 99.95% soft lead metal. Lead will be recovered from the deposits’ clean, oxidized ore by means of crushing, grinding, flotation and filtration.
The share offering has yet to be approved by regulators.
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