Gammon Gold To Issue 11.2M Shares In Bought Deal

The Associated Press

Canadian mining company Gammon Gold Inc. said Wednesday it will issue 11.2 million common shares under a bought deal underwritten by a syndicate led by BMO Capital Markets and UBS Securities Canada Inc.

Gammon priced the shares at US$8.90 apiece. The company expects gross proceeds of US$100 million, and plans to use net proceeds to fund an expanded operations exploration program, pay off debt and general corporate purposes.

The offering is expected to close on or about Oct. 22.

A bought deal is a securities issue bought entirely by underwriters to resell to investors.

Gammon granted the underwriters an option, for a period of 30 days following the closing of the offering, to purchase up to an additional 1.7 million shares to cover overallotments.

Shares of the company fell 48 cents, or 5.1 percent, to $8.88 in premarket trading.