Allied Nevada Gold Corp. (ANV), the operator of the Hycroft gold mine, dropped the most in 19 months after agreeing to sell $150.5 million of shares and saying it’s reviewing plans for a mill at the project.
The shares fell 11 percent to $10.51 at 11:40 a.m. in New York. Earlier they declined as much as 13 percent, the most intraday since September 2011. The Reno, Nevada-based company also said it may carry out a phased construction of an ore- processing plant. It may start with 75,000 tons a day of capacity in 2015 before moving on to the 130,000-ton design rate, it said today in a statement.
Allied Nevada sold 14 million shares at $10.75 apiece and intends to use some of the proceeds for Hycroft, it said in a separate statement. The Nevada project, the company’s only operating mine, produced 38,019 ounces of gold in the first quarter.
The shares were sold in a so-called bought deal, in which the underwriters initially buy all the stock being offered. The underwriters, led by Dundee Securities Ltd. and including Cormark Securities Inc., have an over-allotment option to raise the full offering to $173.1 million, Allied Nevada said.
Allied Nevada said March 28 the performance of Hycroft was below expectations and appointed Chairman Bob Buchan to replace Scott Caldwell as chief executive officer.
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