TORONTO (miningweekly.com) – Shares of Timmins gold camp-focused miner Lake Shore Gold by Friday noon slid nearly 15% on the TSX, following the miner’s announcement that it would raise its public offering of convertible senior unsecured debentures by C$15-million, to C$90-million.
The company on Thursday launched a public offering of convertible senior unsecured debentures totalling C$75-million, which it said was intended to repay and extinguish the company's $50-million three-year corporate revolving facility and for general corporate purposes.
The debentures were offered on a "bought deal" basis at a price of C$1 000 apiece, with a coupon of 6.25% a year, payable twice a year on the last day of March and September starting on March 31, 2013.
The company’s stocks recently jumped when it announced that it had narrowed its second-quarter net loss to $2-million or nil a share, from the net loss of $2.5-million or 1c a share in the same 2011 quarter, boosted mainly by improved grades and production and higher gold prices.
However, the company reported costs per ounce of gold sold during the quarter averaged $916/oz, driven higher by the company’s focus on completing an extensive capital development programme at the Timmins West mine that the company believes would position it for strong production growth in 2013.
The company is currently expanding the milling capacity at its Timmins West mine by half to reach 3 000 t/d by the fourth quarter of 2013, while it was also undertaking extensive exploration drilling at targets within its Bell Creek property, which is also a producing asset, as well as continuing to explore its Gold River Trend and Fenn-Gib properties, all located within trucking distance of the Timmins West mine.
The company’s Toronto-listed stock traded at 91 Canadian cents apiece on Friday, having fallen 20% from the start of the month when the company released its second-quarter results.