Hedge funds slash bullish wagers on gold over Trump election win
Hedge funds and other large speculators boosted net-long positions by 11% to 197,362 as of Nov. 12, the lowest in 14 weeks.
Canadian-based exploration and development company Colossus Minerals was trading lower in a lacklustre Toronto market on Friday after announcing it had raised $75 million in a bought deal.
Colossus is active the mineral-rich Carajas region of Para State, Brazil where it is advancing the Serra Pelada project into production. Billed as one of the highest grade gold and platinum group metals deposits in the world, the area was host to the largest precious metals rush in Latin American history from 1980 to 1986.
Press Release:
Colossus Minerals Inc. (the “Company” or “Colossus”) (TSX:CSI) has today entered into an agreement with Dundee Securities Ltd., on behalf of a syndicate of underwriters consisting of Clarus Securities Inc., Canaccord Genuity Corp., and GMP Securities L.P. (collectively, the “Underwriters”), with PowerOne Capital Markets Limited to act as a selling group member, pursuant to which the Underwriters have agreed to sell, on a bought deal basis, 75,000 units (the “Units”) of the Company at a price of CAD$1,000 per Unit, for gross proceeds to the Company of CAD$75,000,000 (the “Offering”). Each such Unit shall consist of a $1,000 face value Senior Unsecured Gold-Linked Note (the “Notes”) and 60 Common Share Purchase Warrants (the “Warrants”).
The Notes will mature on December 31, 2016 (the “Maturity Date”) and will bear interest, accruing and calculated and payable semi-annually in arrears on June 30 and December 31 of each year, at a rate of between 6% and 13%, dependent on the simple average of the London PM Gold Fixing Price. The Notes will yield 9.0% based on the current London PM Gold Fixing Price. The first interest payment date is December 31, 2011, and will consist of interest accrued from and including the Closing Date calculated in accordance with the simple average of the London PM Gold Fixing Price during the stub interest payment period.
Subject to any required regulatory approval and provided no event of default has occurred, the Company has the option, upon not more than 60 nor less than 40 days’ prior notice, to satisfy its obligations to pay on redemption or maturity, the principal amount of and premium (if any) on the Notes, in whole or in part, by delivering freely tradeable Common Shares. The Company may elect from time to time, subject to any required regulatory approval and provided that no event of default has occurred, to satisfy all or part of its interest payment obligations by delivering sufficient freely tradeable Common Shares to a trustee for sale, in which event holders of the Notes will be entitled to receive a cash payment equal to the interest owed, from the proceeds of the sale of the requisite number of Common Shares by the trustee.
The Notes will rank subordinate in right of payment of principal and interest to all senior obligations of the Company to a maximum principal amount of $25,000,000 but pari-passu with any existing unsecured senior obligations outstanding of the Company.
Each Warrant shall entitle the holder thereof to acquire one Common Share of the Company at a price of $8.50 for a period of five years following the Closing Date.
The Underwriters will also have the option, exercisable in whole or in part at any time up to 30 days after the closing of the Offering, to purchase up to an additional 15% of the Units of the Company. In the event that the option is exercised in its entirety, the aggregate gross proceeds of the Offering will be CAD$86,250,000. Closing of the Offering is expected to occur on or about November 8, 2011 and is subject to regulatory approval including that of the Toronto Stock Exchange.
The Units will be offered by way of a short form prospectus in all provinces in Canada, except Quebec. The Issuer agrees that the Underwriters may distribute the Units in the United States by private placement to “qualified institutional buyers” as defined in Rule 144A, and such other jurisdictions as may be agreed upon by the Company and the Underwriters.
The Company intends to use the net proceeds of the Offering to fund advancement of the Serra Pelada project and for general corporate purposes including working capital.
This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the Unites States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.
About Colossus
Colossus is a Canadian-based exploration and development company focused in the mineral prolific Carajas region of Para State, Brazil. Our primary focus is to advance the Serra Pelada project into production. Serra Pelada is host to one of the highest grade gold and platinum group metals deposits in the world. Between 1980 and 1986 Serra Pelada was host to the largest precious metals rush in Latin American history. Colossus Minerals’ Common Shares trade on the Toronto Stock Exchange (TSX) under the symbol CSI. The Company is headquartered in Toronto, Canada.
Comments
Franciscus J. Baars
Sirs/Madams, a minor technical correction on your article RE Colussus’ US$75M bought deal through Dundee Securities. The Serra Pelada Au-Pd-Pt deposit is, in fact, consistently the richest, i.e. highest tenor gold-, palladium- and platinum-bearing mineral deposit recorded in history. (in the face of new data, I will willingly stand corrected on this assertion.) Although individual grades at some other sites, of differing metallogenic nature, may exceed those encountered at Serra Pelada, which is rare, the overall grades announced in press-release intercepts appear the top the world’s best grades for those elements. Other platinum-group element grades, such as rhodium, iridium, rhenium and osmium are not disclosed and indeed very rare at economic grades in-natura. It also appears, although some authors differ on this, that most of the grades are hypogene, i.e associated with the original ore-rock formation at great depth, and not supergene, i.e. associated with major enrichment in the tropical, lateritic weathering environment in the top, say 50-100 m near the Earth’s surface. These facts all pose specific technical challenges, which surely are being overcome. Exploration and mine developments will surely bring to light further data and details of this geologically exceptional ore deposit.