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Thursday, 18 October 2012
Kirkland Lake Gold to raise $60 mln to fund production expansion program
Kirkland Lake Gold (TSE:KGI)(AIM:KGI) launched late yesterday a $60 million private placement financing of convertible debentures, with the new funds to be used to finance a production expansion program at its operations in Kirkland Lake, Ontario.
It said Tuesday evening that it has agreed with Dundee Securities and CIBC, the co-underwriters, to sell, on a bought deal basis, 60,000 convertible unsecured subordinated debentures at a price of $1,000 each.
The underwriters were also given an option to buy up to another $9.0 million of the offering, which can be used in whole or in part prior to 48 hours before the close of the deal.
The company said the debentures will mature on December 31, 2017 and will bear interest, payable semi-annually, at a rate of 7.5 per cent.
They can be converted into common shares at any time before the maturity date, at a price of $13.7 per common share. This equates to a ratio of 72.9927 common shares per $1,000 principal amount of debentures.
Kirkland plans to use the proceeds for the production expansion program at its mining operations in Kirkland Lake, Ontario, as well as to complete remaining payments due to Queenston Mining related to the acquisition of various joint ventures projects.
Funds will also be used for general corporate purposes, including working capital.
The miner said the debentures will rank subordinate to payment of prinicipal and interest on all current and future senior obligations, and will rank "pari-passu" to all present and future unsecured debt.
The deal is expected to wrap up by around November 7, subject to regulatory approvals.