Allied Nevada Slumps After Share Sale While Mill Reviewed
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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