Red Back Mining to raise C$150m in share sale

Red Back Mining will sell 20-million shares on a bought deal basis to an underwriting syndicate, at C$7,50 a share.

The company will raise C$150-million through the fundraising, which will be coled by Cormark Securities, BMO Capital Markets, GMP Securities and Scotia Capital.

The proceeds will be used for working capital and general corporate purposes, Red Back said.

The underwriters will also have an option to buy up to an additional 2-million shares at the same price to cover allotments or for market stabilisation purposes.

The offering is scheduled to close on or about February 12.

Red Back owns two gold mines, Chirano in Ghana and Tasiast in Mauritania, as well as several projects in Ghana.

The company is the latest in a list of gold producers who have successfully raised finance in the last two months, while their less fortunate peers who mine other commodities continue to struggle for access to either credit or equity markets.

Late last year, the firm raised C$60-million, which it increased from C$40-million citing strong demand.

Red Bank produced 260 847 oz last year, and expects to boost output 53% in 2009, to 400 000 oz, the firm said last week.

Shares in the company slid 3,46% on Friday, to C$7,54 a share by 11:54 in Toronto.

Source: Mining Weekly