TORONTO (miningweekly.com) – Midtier gold producer Guyana Goldfields has increased its previously announced bought deal financing to C$130-million from C$110-million, citing “strong demand”.

The Toronto-headquartered company had signed an agreement with a syndicate of underwriters led by BMO Capital Markets, Scotiabank and RBC Capital Markets, as joint bookrunners, under which the underwriters agreed to buy on a bought deal basis 12.83-million common shares from the company and one-million common shares from the founder and executive chairperson of the company, Patrick Sheridan, at C$9.40 each.

The underwriters also had an overallotment option to buy up to a further 15% of the offering. The offering was expected to close on or around July 19 and was subject to the company receiving all necessary regulatory approvals.

Guyana Goldfields advised that it expected to use the net proceeds to fund an expansion of its flagship Aurora gold mine from 5 000 t/d to 8 000 t/d by 2017, for expanded exploration activities, potential debt repayment and for general corporate purposes. The net proceeds from the secondary portion would be paid to Sheridan.

The company planned exploration activities focusing on infill drilling at the Aurora mine, targeting near-surface inferred resources and increasing drill density at Aleck Hill, and would also include drill-ready targets within a 30 km radius of the mine and on the Aranka concession.

Meanwhile, Guyana Goldfields expected total gold output from its Aurora mine to hit 75 000 oz by June 30, as increased throughput levels and a higher grade than originally predicted in the mine plan prompted it to lift its 2016 production guidance to a range of 140 000 oz to 160 000 oz, from a previous guidance of 130 000 oz to 150 000 oz.

The company expected the cash cost (before royalty) guidance to remain unchanged at $487/oz to $537/oz, while all-in sustaining costs would rise from a range of $637/oz to $687/oz, to a range of $670/oz to $720/oz, reflecting the unbudgeted purchase of a used Twin Otter airplane for more efficient and flexible local transportation and supplies, as well as capital expenditures for various plant facility optimisation and infrastructure improvement projects.

The company’s stock on Monday fell 10.5% to C$9.04 apiece.