TORONTO (miningweekly.com) - Brad Mills has been keeping a low profile since his abrupt exit as boss of number-three platinum producer Lonmin, but last month the company he now heads, Mandalay Resources, graduated to the TSX main board.

Mandalay, with a market capitalisation of C$31,8-million, is much smaller than Lonmin, which is worth around C$4,5-billion.

The junior mining company owns large explorations tenements in Chile, and last year bought a small Australian antimony and gold mine from Western Coal Corp, the Vancouver-based miner.

In May, Mandalay agreed to buy a Chilean gold and silver mine from TSX-listed Coeur d'Alene Mines for C$6-million in cash and C$5-million in shares.

The deal was to have closed by June 30, but last week Mandalay said it had agreed with Coeur to extend the closing date to July 15.

Mandalay also announced in May it was looking to raise C$40-million from selling shares and share warrants to pay for the acquisition, and to bring the newly acquired Cerro Bayo mine – located in Patagonia, Chile – back into production.

The mine was mothballed in October 2008, a year in which it produced 21 700 oz of gold and 1,2-million oz of silver.

“We expect Cerro Bayo to complete its restart plan by mid-2011 adding substantial production, reserves and resources to Mandalay,” the company said.

The capital costs to restart operations were pegged at some $11-million in 2010 and $10-million in 2011.

It is not clear how successful Mandalay has been in raising the C$40-million, though it was supposed to have completed the exercise by June 30.

Mills declined an interview with Mining Weekly Online this week, but last month told Miami-based Latin Finance: “One thing we like about Chile is that it has a very stable mining tax regime and a strong mining oriented culture, which makes it a very attractive place to do business.”

Mandalay has a stated objective of having four to five producing mines within the next three to four years.

Assuming it closes Cerro Bayo deal, that means it already has two mines.

In December, Vancouver-based Western Coal Corporation sold Mandalay the producing Costerfield gold and antimony mine.

Mandalay said the operation would produce gold at a rate of 16 500 oz/y by the end of June, by which stage it would be cash-flow positive.

The other project that might add to its production portfolio is the La Quebrada copper-silver exploration tenement near La Serena, Chile. The Toronto-based company aims to complete a mineral resource estimate at La Quebrada in the fourth quarter of 2010.

Mandalay appointed Mills, who also serves as independent nonexecutive director at Russia's Norilsk Nickel, as CEO in September last year.

He abruptly left Lonmin a year earlier, as it was trying to fend off diversified major Xstrata's hostile takeover bid. In fact, Mills departed a week before Xstrata announced it would not go ahead with the takeover.

In 2009, Mills and current Mandalay COO Mark Sander co-founded Plinian Capital, which aimed to invest in distressed mines. Plinian is a major shareholder in Mandalay.

Sander studied with Mills at Stanford University.

Sanjay Swarup followed Mills from Lonmin to become Mandalay CFO.

Another financial backer and shareholder of Mandalay is Audley Capital, headed by Julian Treger, a corporate financier who used to work for J Rothschild Group and Hambros Bank. Treger also serves on the Western Coal Corp board.

Mandalay was trading at C$0,31 a share on Wednesday afternoon, down 4,7% from its previous close.

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