Allied Nevada Gold Corp., the operator of the Hycroft gold mine, dropped the most in two weeks after agreeing to sell $150.5 million of shares and saying it’s reviewing plans for a mill at the project.
The shares fell 9.6 percent to $10.70 at the close in New York, the most since April 15. 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.