Kirkland Lake will raise C$25,3m, makes progress on paste fill hole
miningweekly.com
By: Liezel Hill
18th August 2009
TORONTO (miningweekly.com) – TSX- and Aim-listed Kirkland Lake Gold will raise at least C$25,27-million by selling shares and warrants, the firm announced on Tuesday.
The company has entered into an agreement with Wellington West Capital Markets to sell 3,1-million units at a price of C$8,15 each, on an underwritten private placement basis.
Each unit will comprise one common share and one-third of one common share purchase warrant, and the underwriter will also have an overallotment option to buy another 465 000 units, which, if full exercised, would increase the gross proceeds to C$29,05-million.
The company intends to use the funds raised for working capital and general corporate purposes, it said.
Meanwhile, Kirkland Lake also reported on Tuesday that a new four-inch paste hole at its Ontario gold mine is now 60% complete and the company expects to resume paste-fill activities by mid-September.
The company reported early in July that it had encountered an unexpected obstruction blocking the paste-fill borehole above level 34, and that efforts to clear the obstruction had not met with success.
After drilling a three-inch hole through the plug in recent weeks, large pieces of cave rock were found in the hole, the firm said.
“It was determined that the twelve inch bore hole had collapsed after eighteen years of service, and that efforts to reopen and to continue to use the hole, had a low probability for success.”
The company had already decided to accelerate the drilling of the back-up pastefill boreholes originally planned for later this year, and started drilling the first replacement hole from the surface in mid-July.
The underground drifting required to intercept the hole and create a functioning paste system is under way, and the firm is aiming to resume paste-fill activities in early to mid-September.
The mining crews affected by the fill delay have been relocated to other production, exploration, or capital heading work.
A second four-inch back-up paste-fill hole will be drilled after completion of the first hole.
“The company expects the new holes to generally improve the reliability of pastefilling operations as a four-inch hole is easier to maintain and work with than a twelve inch hole,” Kirkland Lake added.
During the firm's financial first-quarter, ended July 31, sales reached a best-ever 21 014 oz of gold. Production was 17 135 oz.
Once normal operations resume, the company expects to produce 25 000 oz a quarter “on a consistent basis”, chairperson Harry Dobson said in a statement.
Kirkland Lake bought the Macassa mine, a 1 500-t/d mill, along with four former producing gold properties, in December 2001, from Kinross Gold.
Shares in the company rose 1,4% on Tuesday, to C$8,79 apiece by 14:50 in Toronto.
Edited by: Liezel Hill |
