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Hedge funds and other large speculators boosted net-long positions by 11% to 197,362 as of Nov. 12, the lowest in 14 weeks.
Caldas Gold is raising C$85 million through a subscription receipt offering with a group of investors that will result in a new board and management, as well as a new name – Aris Gold.
Once the financing is completed, the expansion of Caldas Gold’s Marmato mine in Colombia will be fully financed, with construction expected to begin in the second half of 2021.
The new management team will be led by Neil Woodyer as CEO, who will take the reins from current CEO Serafino Iacono. Woodyer is the former CEO of Leagold Mining (now part of Equinox Gold) and a founder of Endeavour Mining.
The new board nominees include Ian Telfer (former CEO of Goldcorp and Wheaton River Minerals) as chair; David Garafalo (former CEO of Goldcorp and Hudbay Minerals); Peter Marrone (CEO of Yamana Gold); Attie Roux (former COO of Endeavour Mining and Equinox Gold); Daniela Cambone (former editor-in-chief of Kitco News) and Woodyer.
The non-brokered private placement subscription receipts financing is expected to close around Nov. 27
After the financing is completed, Gran Colombia Gold will become a 45% shareholder in Caldas Gold and will have the right to appoint two directors to Aris Gold, which will be Iacono and Hernan Martinez. In addition, Frank Giustra will act as a strategic advisor.
The incoming board and strategic advisor will account for C$38 million of the subscription receipt financing.
“It is with great pleasure that we announce the launch of the new Aris Gold today,” said Woodyer. “We believe the Marmato mine with its current production and expansion plans supported by a large-scale gold resource represents an ideal platform for us to build a major gold mining company. With this C$85 million financing, the existing $110 million streaming financing with Wheaton Precious Metals and new support from Orion Mine Finance, the MDZ expansion program is fully funded. We are thankful to have the continued support of Gran Colombia in this placement, as we transition the company into full independence.”
Serafino Iacono is executive chairman of Gran Colombia and CEO and executive chairman of Caldas Gold. Marmato was previously a Gran Colombia project, which the junior spun off into Caldas Gold early this year.
“I am extremely excited to introduce a new leadership team and financing partners to Caldas Gold,” he said. “Marmato now has all the tools at its disposal to transition to an optimized and fully modern mine in Colombia. Importantly, the company-building track record of the Aris Gold team combined with the in-country experience of Gran Colombia will enhance the Marmato mine and MDZ expansion and help bring the new Aris Gold to the world stage.”
In addition to Woodyer, the new proposed management team consists of many former Leagold and Endeavour team members, including Attie Roux as a technical consultant; Doug Bowlby as senior vice-president, corporate; Ashly Baker as general counsel and corporate secretary; Robert Ecker as vice-president finance and CFO; and Richard Thomas as technical consultant; as well as Andrew Gubbels senior vice-president corporate development.
On the closing of the transaction, change of control payments will be issued to existing management including Iacano, president Lomardo Paredes, CFO Michael Davies and corporate secretary Amanda Fullerton totalling close to $2 million, as well as cash severance payments of close to $7 million. An independent committee relying on independent legal counsel approved both the Aris transaction and the payments to related parties.
The non-brokered private placement subscription receipts financing is expected to close around Nov. 27. Caldas has also completed three other financings this year totalling $230.5 million to fund Marmato.
The underground mine, in Caldas, Colombia, produced 16,651 oz. gold and 23,404 oz. silver for the first three quarters of the year.
A prefeasibility study released in July projected that an initial capital investment of $269.4 million for expansion into the Marmato Deep Zone would result in production of 165,400 oz. gold per year from 2024 through 2033 at an all-in sustaining cost of $872 per oz. The expansion study was focused on the construction of a new 4,000 t/d plant and new dry stack tailings storage facilities, and the introduction of mechanized mining (longhole stoping) in 2023.
Marmato contains measured and indicated resources of 39.4 million tonnes grading 3.2 g/t gold for 4.1 million oz. That includes proven and proble reserves of 19.7 million tonnes grading 3.19 g/t gold and 6.87 g/t silver for 2 million oz. gold and 4.3 million oz. silver.
In addition to Marmato, Caldas holds the Juby gold project 100 km south of Timmins, Ont.
(This article first appeared in the Canadian Mining Journal)
