Drilling at Volta Grande, Brazil.
Photo by: Belo Sun
TORONTO (miningweekly.com) – Canadian gold miner Agnico Eagle has acquired a 17.4% stake in Belo Sun Mining, which is developing the Volta Grande project in Para state, Brazil.
Belo Sun on Thursday issued 62.5-million common shares to Agnico Eagle at C$0.24 apiece, for proceeds of C$15-million.
Agnico Eagle gained the right to participate in certain future equity offerings by Belo Sun in order to maintain its pro rata investment and to nominate one person to the board of directors of the company, provided that Agnico Eagle continued to hold no less than 10% of the issued and outstanding common shares of Belo Sun on a nondiluted basis.
Should Belo Sun’s board increase to ten or more directors, Agnico Eagle would have the right to appoint a second director.
The Volta Grande, or Big Bend, openpit project was located in one of the most active mining states in the country and would become Brazil's largest gold mine when it starts production next year.
Belo Sun in March completed a feasibility study highlighting a straightforward openpit mine, with an estimated average output of 205 000 oz/y of gold over 17 years, with all-in sustaining costs of $779/oz.
The project was located next to the controversial Belo Monte project, which was designed to become the world's third-largest hydroelectric dam and which had been the target of lawsuits by prosecutors.