Jaguar Mining raises $25m; stock up over 40%
Jaguar Mining Inc. (TSX: JAG) today announced a $25 million private placement offering through the issuance of common shares at a discount of C$0.085 (the closing price of JAG shares on June 17 was C$0.12). The company’s two largest shareholders – Eric Sprott and Tocqueville Asset Management LP – both intend to participate in the financing.
Once completed, the company plans to use the proceeds to improve its existing mining operations in Brazil. All of the company’s current operations are located in the Iron Quadrangle, a prolific greenstone belt near the city of Belo Horizonte in Minas Gerais, Brazil.
“The offering will result in an opportunity to increase developed reserves, improve and update the capital equipment and infrastructure, increase gold production, expand reserves, reduce expenses per ounce of gold produced, improve efficiencies and cash flow, and reduce the financial distress caused by debt,” says interim CEO Benjamin Guenther.
“The offering represents an opportunity for Jaguar Mining to remedy its operating issues at its Turmalina mine,” says Sprott, the company’s biggest shareholder.
Shares of Jaguar Mining shot up over 40% following the financing news. The company’s market capitalization sits at approximately C$56 million.