Agnico-Eagle Mines Ltd.(TSX: T.AEM, Stock Forum)is steppingup to take shares in a private placement that will give the gold mining giant a 20% stake in Panama-focused Pershimco Resources Inc. (TSX: V.PRO, Stock Forum).
Pershimco saidThursday it has hired an underwriting syndicate to sell by way of a private placement approximately 41 million shares at 17 cents a share, for gross proceeds of $7 million.
Pershimco shares fell 8% ot 17.5 cents Thursday after trading in the stock resumed, leaving the mineral exploration and development company with a market cap of $39 million based on 223 million shares outstanding. The 52-week range is 45 cents and 13 cents.
Pershimco said in a press release that Toronto-based Agnico is participating in the private placement and that net proceeds are destined to fund engineering, development and construction of the Cerro Quema gold project as well as continued exploration expenditures in Panama, and general administrative purposes.
Cerro Quema is the company's flagship project and is located on the Azuero Peninsula in southwestern Panama.
With proven and probable reserves standing at 488,000 ounces of contained gold, the open pit project is scheduled to be in production by 2016. Cerro Quema will be a 10,000 tonne-per-day heap leach facility with an estimated mine life of 5.3 years, the company has said.
The project is expected to be profitable and will result in the production of 417,812 ounces of gold, at an average cash cost of $402 an ounce, according to a June, 2014 technical report by Golder Associates Inc.
The technical report said the potential exists to find additional zones of gold oxide mineralization along the alteration trend that hosts the La Pava, Quemita-Quema, and La Mesita deposits.
