TORONTO (miningweekly.com) – Vancouver-based Farallon Mining will raise about C$10-million in a bought-deal offering of shares, and plans to use the funds to study a mill expansion and for exploration at its zinc/copper mine in Mexico.

The company has inked an agreement with a syndicate of underwriters led by Paradigm Capital and Raymond James, which will buy about 24,1-million shares at 41,5 Canadian cents a share.

The underwriters will also have an overallotment option to buy additional shares equal to 15% of the offering.

“Proceeds will be used to advance programmes aimed at evaluating a mill expansion to 2 000 t/d by July 1, 2010, and the restarting of exploration drilling on site in early October as well as other corporate and working capital purposes,” the company said.

Farallon G-9 zinc, copper, silver, gold and lead mine at the Campo Morado property in Mexico reached commercial production in April this year.

“The additional C$10-million in financing comes at a time when the company is poised to capitalise on the recent strength in the world metal markets,” CEO Dick Whittington said in a statement.

“The funds will backstop our cash flow from the G-9 operations and allow us to aggressively advance our mill expansion and exploration programmes.”

Farallon is targeting an annualised production rate of 120-million pounds of zinc and 15-million pounds of copper at the G-9 operation.

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