S. Atlantic cashes up for Zinkgruvan

Lundin Group company South Atlantic Ventures (SAA-V) has priced the share offering that will finance its purchase of the Zinkgruvan zinc mine in Sweden from Rio Tinto (RTP-N).

A syndicate led by GMP Securities will offer 18 million shares in South Atlantic on a best-efforts basis at $8 per share, for gross proceeds of $144 million. An option lets the agents (GMP, plus BMO Nesbitt Burns, Haywood Securities, and Macquarie North America) increase the size of the offering by a further 2 million shares within 30 days of the offering’s closing date, which is expected to be June 2.

A final short-form prospectus was filed in five provinces for the offering.

South Atlantic reached a deal in March with Rio Tinto to buy the Zinkgruvan mine for US$100 million plus adjustments for working capital. Rio Tinto also can receive up to US$5 million in participation payments if zinc, lead and silver prices remain high.

Zinkgruvan, about 70 km northwest of Norrkoping in south-central Sweden, has proven and probable reserves of 9.5 million tonnes grading 9.8% zinc, 4.8% lead and 97 grams silver per tonne.