Canadian mining company, Guyana Goldfields is showing massive losses for 2012 thus far and is now worth CDN$228 million on the TSX – its value having dropped more than 60% year to date on the back of a disappointing feasibility study for its Aurora gold project here.
The company has reported that it has hired St. John Lees, former area manager infrastructure for Rio Tinto’s massive Simandou iron ore project in Guinea, West Africa, as vice president for projects. A report on mining.com said that despite the hiring of Lees-who was described as a “heavy hitter” – and rumours of being a possible takeover target of IAMGOLD, Guyana Goldfields stock remained in a slump. On the whole the mining sector was generally weak last week, the report said.
Meanwhile, last Wednesday, Guyana Goldfields announced that it raised CDN$31.7 million through a private placement deal. The company issued 10.9 million common shares at a price of C$2.91 per share. The Baupost Group LLC, a Boston, Massachusetts-based institutional investor, purchased 7.9 million shares for approximately CDN$22.9 million in aggregate proceeds. Baupost now holds approximately 18.5% of the outstanding shares, and has the right to appoint an independent director to the Company’s Board of Directors.
In addition, the statement said, funds managed by Franklin Advisors Inc. purchased 2.5 million shares and Patrick Sheridan who serves as the Chief Executive Officer and interim President and Chief Operating Officer of Guyana Goldfields purchased 500,000 shares.
Following the closing, Franklin and Sheridan held approximately 11.2% and 5.8% of all of the issued and outstanding shares, respectively, the statement said.
The company said that the proceeds will be used towards the strategic plans for 2012 and to continue exploration of its portfolio of gold exploration properties here. The Offering remains subject to the final approval of the Toronto Stock Exchange.
The company’s Aurora Project here will be the first underground gold mine in the Guiana Shield. Production is set to begin in 2014 at the location along the banks of the Cuyuni River in Region Seven.
The company has said that it is looking to produce
