Fortuna raises $60m to complete Lindero project construction

Fortuna Silver Mines (NYSE: FSM, TSX: FVI) announced Monday it has arranged a bought deal financing with a syndicate of underwriters led by Scotiabank and BMO Capital Markets to purchase 20 million common shares at $3.00 per share for aggregate gross proceeds of $60 million.

The company has also granted the underwriters an over-allotment option to purchase up to an additional 3 million shares, which could increase the aggregate gross proceeds from the offering to $69 million if exercised in its entirety.

Net proceeds of the offering will be used to fund remaining construction and preproduction related expenditures at the company’s Lindero gold project in Argentina.

Last week, Fortuna said it needed $75 to $80 million to complete the construction and fund the project to the start of commercial production, which is scheduled for the first quarter of 2021.

Before construction teams at Lindero were demobilized on March 19 to comply with Argentina government’s national social isolation mandate, the project was 94% complete.

Argentina has approved Fortuna’s plans to resume construction activities with a reduced on-site workforce in support of physical distancing measures. Mobilization to the project site is expected to take place in the second half of May.

Open-pit mining at Lindero is planned to gradually resume in July. During the period from July to December, an estimated 1.7 million to 1.9 million tonnes of ore will be placed on the leach pad with an average gold grade of 1.00 g/t to 1.10 g/t.

Between 25,000 and 28,000 ounces of gold doré are scheduled to be produced from September until the end of December, the company said.

Once commercial production begins, the mine is expected to produce 145,000 to 160,000 ounces of gold per year at an all-in sustaining cost of $520 to $620 per ounce.

Shares of Fortuna were up 0.2% on the TSX Monday. The Vancouver-based mining company has a market capitalization of C$732.5 million.

source: Mining.com