MFL: Bought-Deal Financing

MICHAEL JALONEN, Merrill Lynch (01/05/2011)
"On Dec 13, Minefinders announced a bought-deal financing with a syndicate of underwriters who agreed to purchase 13.65M common shares at a price of CAD$11.10/sh for gross proceeds of CAD$151.5M. An overallotment option remains outstanding (expires January 20, 2011), whereby the underwriters can purchase up to an additional 2.0475M common shares at the offer price. Due to the additional shares outstanding, our 2011 and 2012 EPS estimates have dropped from $1.34 and $1.35 to $1.13 and $1.14, respectively.

Minefinders intends to use the net proceeds of the offering to fund future expansion and mill construction at the Dolores mine (not in our estimates), as well as development of the La Bolsa project (already included in our estimates). The addition of a mill at Dolores would result in higher levels of production due to higher recovery rates through the mill. Previous metallurgical studies indicated mill recovery rates of 90%–95% for gold and 85%–90% for silver, versus the current expected heap-leach recovery rates of 72.3% and 50.8%, respectively.

In Q111, the company will be providing 2011 production guidance; Q410 operating figures (current Q410 guidance is for 11–12 Koz. gold and 500–600 Koz. silver) and results of the Dolores mill feasibility study."

 PRINT THIS PAGE   EMAIL THIS PAGE

Under SEC rules, analysts are required to disclose their interest in securities that they cover. We strongly encourage you to contact them to understand any potential conflicts of interest they may have.

Related Quotes: