The company will need to find $US275 million ($A313.5 million) to fund the capital costs of the mine’s development, according to the project feasibility study released early this month.
The feasibility study showed the Argentinean project could be among the world’s cheapest to mine, with Cerro Negro likely to pay off its infrastructure price tag in less than two years.
Andean has cut a deal with a syndicate of underwriters, including BMO Capital Markets and RBC Capital Markets, to raise the first portion of that, agreeing to a bought deal financing arrangement that will involve it issuing 70 million shares at $C3.35 – a 4.2% premium to the company’s 30-day volume-weighted average trading price (based on closing prices) on the Toronto Stock Exchange of $C3.21.
Andean had around $A76 million at bank at the end of the last quarter.
A company spokesperson told MiningNews.net the raising would mean the vast majority of the Cerro Negro capital costs would be funded, as Andean has around $60 million of that total left.
She said the company was likely to go to the debt markets at some point over the next 12 months, however, to top up funding for the project’s capital requirements.
The offer, through a short-form prospectus, is expected to close on August 11 if Andean receives all of the necessary regulatory approvals.
Andean entered a trading halt this morning ahead of a parallel announcement to the Canadian market later today, North American time.
Its shares last traded on the Australian Securities Exchange at $A3.83 and on the TSX at $C3.44.
