Recent financing deals

Below are 10 other very recent financing deals in the gold minding space. They are all bought deals, and I think they were all Toronto deals also. As you may know, a bought deal is when the underwriter(s) buy the shares directly from the company. They then try to sell the shares to the public at a certain price (after the fact). If the underwriter(s) is unable to sell all of the bought shares then the underwriter(s) is forced to keep the remaining balance (none can be returned back to the company).

A bought deal is very straight forward, and perhaps it is the quickest deal to close, as the shares are essentially bought at the date of the announcement (with the exception of over allotments). The most time consuming part (prior to closing) is probably the documentation aspect. With the 10 companies below, the closing timeframe ranged from 10 days to 28 days (with many being around 21 days).

Now, Century’s deal is not a bought deal, obviously. It is also a gold-based financing deal, which is completely different from all of the deals indentified on this post. The entire process for Century’s deal is substantially more complex to put together. As such, it is logical to think that the targeted timeframe required to put together this gold-based financing deal would be dramatically greater. However, (although it’s a longer timeframe) it doesn’t appear to be that much longer. Century’s deal was announced on February 2’09 and Century has given a targeted close date of end of February, thus representing a close off timeframe of 27 days.

It’s either Octagon and Peggy are feeling confident that they can get sufficient institutional investors to subscribe to this gold-based financing offer or they have miscalculated with regards to the timeframe required. Certainly, the 27 day turnaround time might suggest that Octagon and Peggy believe they have gone into this with a solid game plan for success – let’s hope so.

I think there might be a certain appeal/attractiveness to our offer (perhaps that fills a void). What we have going for us is the innovativeness of this gold-based financing deal. As you can see, all of these other 10 companies sold the exact same deal. No one offered the option of buying gold ounces and getting free shares (along with the cheap warrants). Our deal may be appealing for institutional investors who are looking for something different, especially the attractiveness of owning their gold ounces (with the extremely bullish gold price outlook).

In my opinion, the gold-based financing offers the best of all worlds:

1) it’s like owning your own little mining company (which produces 1 oz gold per year);

2) while being invested in a gold ETF (getting the pure gold price benefits like ETFers);

3) while owning shares in a publicly traded company (realizing significant share price appreciation)


I guess only time will tell how well the deal comes together


1) Agnico-Eagle Mines - $290M US bought deal, announced Nov 20’08 – was closed 14 days later

2) Red Back Mining, deal #1 - $60M Cdn bought deal, announced Nov 21’08 – was closed 21 days later

3) Minefinders - $40M Cdn bought deal, announced Dec 2’08 – was closed 10 days later

4) Centamin Egypt - $60M Cdn bought deal, announced Jan 20’09 – expected to close 28 days later

5) Kinross Gold - $360M US bought deal, announced Jan 21’09 – expected to close 15 days later

6) Red Back Mining, deal #2 - $150M Cdn bought deal, announced Jan 23’09 – expected to close 21 days later

7) Anatolia Minerals - $52M Cdn bought deal, announced Jan 23’09 – expected to close 21 days later

8) Alamos Gold - $75M Cdn bought deal, announced Jan 26’09 - expected to close 22 days later

9) Silver Wheaton - $250M Cdn bought deal, announced Jan 26’09 – expected to close 19 days later

10) Osisko Mining - $350M Cdn bought deal, announced Feb 3’09 – expected to close 22 days later