Money appears to be flowing in the mining sector again, with two large producers announcing the closing of financings this morning.
The first to announce the close of fundraising was IAMGOLD Corp (TSX: IMG), whom raised US$300 million via a bought deal financing. Priced at US$4.17 per share, the offering was led by National Bank, BMO Capital Markets, and RBC Capital Markets. The funding round resulted in the issuance of 72.0 million shares.
The financing will see the company use the funds to repurchase a 9.7% interest in the Cote Gold Mine from Sumitomo Metal Mining Co, which upon closing will bring its total ownership in that project back to 70%. Funds raised from the financing are expected to be placed into an interest-bearing account until the transaction is completed later this year.
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Hudbay Minerals (TSX: HBM) was the next producer to close on significant capital this morning. The offering, also a bought deal financing, was led by RBC Capital Markets and BMO Capital Markets. The financing, which saw the full exercise of an over-allotment option, raised the company US$402.5 million, via the issuance of 42.37 million shares at a price of US$9.50 per each.
Proceeds from that financing are to be used for near-term growth initiatives, which is to include the acceleration of mine pre-stripping activities and mill optimization at the firms Copper Mountain operation. Funds are also earmarked to be used towards debt repayments and the evaluation of mill throughput enhancement options at Constancia and New Britannia.
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