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Lake Shore Gold financing to raise up to $76.9M

With commercial production expected at its flagship Timmins Mine in the fourth quarter of 2010, Lake Shore Gold has entered into an agreement to raise gross proceeds of up to $76.9 million.
Northern Ontario Business Staff

With commercial production expected at its flagship Timmins Mine in the fourth quarter of 2010, Lake Shore Gold has entered into an agreement to raise gross proceeds of up to $76.9 million.

The deal with a syndicate of underwriters led by BMO Capital Markets is scheduled to close on or about Sept. 10, 2010.

The United Kingdom-based Hochschild Mining plc, which holds a 37 per cent stake in Lake Shore Gold, has declined to participate in this round of financing. This will reduce Hochschild's holdings in Lake Shore to 35 per cent.

“Hochschild remains supportive of Lake Shore Gold; however, the board and management team see organic growth through investment in Hochschild's extensive and rapidly expanding exploration pipeline as the company's key priority,” said the company in a release.

Proceeds from the financing will be used for ramping up the Timmins Mine, advanced exploration at Thunder Creek and Bell Creek, as well as expansion of the Bell Creek Mill.