Carpathian suspends construction of Riacho dos Machados, amends financing
Bnamericas Published: Thursday, October 20, 2011
Toronto-based Carpathian Gold (TSX: CPN) has temporarily suspended construction at its Riacho dos Machados (RDM) gold project in Brazil's Minas Gerais state, the company reported in a release. Carpathian was advised that its local subsidiary should not start any installation work on the project until the recently granted ad referendum installation license is ratified by state environmental regulator Copam, pending further review of technical documents. On September 16, Carpathian announced it had received the license allowing construction to proceed, and this additional technical review was unexpected, the company said, adding it is working on the revised timeline for the project together with Copam and other governmental authorities. The project has proven and probable open-pit reserves of 20.9Mt grading 1.24 g/t containing 830,200oz. FINANCING On October 13, Carpathian announced a bought deal equity offering of 80mn common shares at a price of Cdn$0.50 each. In light of the halt to construction, the company and the underwriters have agreed to amend the terms of the deal to provide for an offering of 100mn subscription receipts which will be automatically exchanged for one common share. The issue price of the subscription receipts will be Cdn$0.40 each for aggregate proceeds of Cdn$40mn (US$39.1), the firm said. The underwriters have been granted an option to purchase up to an additional 15mn subscription receipts at the offering price within 30 days of closing for additional gross proceeds of up to Cdn$6mn. The offering is scheduled to close on or about November 3. The proceeds will be used for the construction and development of RDM and general corporate purposes.
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