Detour Gold Raises $149 Million in Share Sale to Help Fund MineSimon Casey
Detour Gold Corp., a producer of the metal backed by hedge-fund manager John Paulson, raised C$153 million ($149 million) to help fund its mine in northern Ontario.
Underwriters led by BMO Capital Markets agreed to buy 17.5 million shares at C$8.75 apiece, the Toronto-based company said today in a statement. The transaction is a so-called bought deal, in which the underwriters initially buy all the stock being offered.
The underwriters for the BMO deal have an over-allotment option to buy as many as 2.63 million shares to raise an additional C$23 million.
Detour said it intends to use the proceeds from the sale for working capital while its Detour Lake mine ramps up, and for “general corporate purposes.” The company poured the first gold from the mine in February. Since then it has twice cut its 2013 production forecast as gold prices dropped.
The shares rose 6 percent to C$9.23 today before they were halted prior to the announcement. They have declined 63 percent this year.
Paulson’s hedge-fund firm Paulson & Co. held a 13 percent stake in Detour as of April 3, according to data compiled by Bloomberg, making it the largest investor.