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Thursday, 13 December 2012
Batero Gold closes private placement financing with Consorcio Minero Horizonte, raises $17.8 mln
Batero Gold Corp. (CVE:BAT) has closed a private placement financing with private Peruvian gold producer Consorcio Minero Horizonte, as per a strategic alliance agreement between the two parties struck last month.
The deal will see Horizonte take a 35 per cent in Batero, raising up to $20 million for the development of the Batero-Quinchia project in Colombia. The agreement includes an equity private placement financing, as well as an agreed loan of $2.2 million to Batero from Horizonte, all together raising up to $20 million for Batero.
Today, Batero said it has sold a total of 8.9 million common shares at a price of 65 cents each, and 18.5 million subscription receipts at 65 cents each to Horizonte, raising a total of $17.79 million.
Horizonte already owned around 8.9 per cent of Batero prior to the placement, on a partially diluted basis. Following the offering, Horizonte now controls about 19.9 per cent of Batero, assuming all convertible securities held are exercised.
Once the subscription receipts under the financing are also converted, which is expected in January, Horizonte will own roughly 35 per cent of Batero.
Batero still needs to get approval from its shareholders for the conversion of the subscription receipts, which it expects will happen at the annual and special general meeting of stockholders on December 31.
The new funds will be used to develop the Batero-Quinchia gold project in Colombia, as well as for working capital purposes.
The company said the cash is sufficient to fund the development of its project through to completion of a technical study, compliant with Colombian legislation for production.
Batero will also mantain its 100 per cent royalty-free stake in the project and will benefit from Horizonte's operational expertise, as well as the premium at which the financing was transacted - minimizing dilution for Batero's shareholders.
The project has an initial resource estimate of 3.5 million ounces of indicated gold and 2.6 million ounces of inferred gold. The open pit resource estimate is based on a 0.16 grams per tonne (g/t) cut off, with 70 per cent of the project remaining unexplored.
La Cumbre is one of the three porphyry deposits at the Batero-Quinchia project, with at and near surface oxidized gold mineralization grading greater than 1.0 g/t gold in the central core of the deposit, as well as lateral and vertical continuity of gold mineralization.
The company's 4,947 metre completed drill program this year was aimed at infill drilling to upgrade the indicated mineral resources at La Cumbre to the measured resource category, and to test for potential extensions.