G Mining raises US$116mn to finance Brazil gold project

G Mining Ventures (GMIN) has raised Cdn$151mn (US$116mn) from a private share placement to finance the Tocantinzinho gold project in Brazil's Pará state.

The Canadian firm said in a statement that the placement was made via two tranches and the shares were acquired by strategic investors.

"Following the closing of the second tranche, La Mancha holds 111,879,265 common shares of GMIN, which represent approximately 25.0% of GMIN’s outstanding common shares, and the holdings of Eldorado Gold Corporation and Franco-Nevada Corporation now total 17.7%and 9.9%, respectively," it said.

Tocantinzinho is a permitted and construction-ready 2Moz open-pit gold deposit that GMIN bought last year for US$115mn from Eldorado Gold.  A feasibility study from February put initial capex at US$458mn.

GMIN plans to conclude an exploration and drilling program in the fourth quarter and the completion of detailed engineering in the first half of 2023.

The company expects first gold production to take place in the second half of 2024 and full production capacity to be reached in 2025.

The financing operation was concluded at a time when investors have a favorable view of Brazil’s mining sector, compared with other Latin American countries where the industry is exposed to more government intervention.

"Brazil is strengthening its national mining regulator, digitizing most mining process, passing laws that facilitate funding. The country has taken very important steps to develop mining," Rodrigo Barbosa, the CEO of Canadian mining company Aura Minerals, told BNamericas. “What I’m seeing from investors is that the current legal frameworks in Brazil are stronger than in other major mining countries, such as Chile, Peru and Colombia.”