Senior unsecured notes convert into common stock with a 25% premium
By Devika Patel
Knoxville, Tenn., Nov. 12 - Detour Gold Corp. said it arranged a $500 million private placement by issuing 5% senior unsecured convertible notes to Paulson & Co. Inc. and other investors.
The notes may be converted into common shares at C$40.125 per share, which is equal to a 25% premium to the closing sale price of the shares on Nov. 11, C$32.10. They are due in seven years. They may be called after three years.
Paulson will invest at least $230 million.
Settlement is expected Nov. 29.
Proceeds will be used to finance the development of the company's Detour Lake gold project in Ontario.
"The signing of this indication of intent marks another significant step in the development of the Detour Lake project," president and chief executive officer Gerald Panneton said in a press release.
"In 2010, the company achieved several significant milestones, including the completion of a positive feasibility study, provincial approval to commence construction, raising C$290 million in equity, and proceeding with this convertible notes financing. These achievements have allowed Detour Gold to remain on target for commencing mining operations in early 2013."
The gold exploration and development company is based in Toronto.
| Issuer: | Detour Gold Corp.
|
| Issue: | Senior unsecured convertible notes
|
| Amount: | $500 million
|
| Maturity: | Seven years
|
| Coupon: | 5%
|
| Price: | Par
|
| Yield: | 5%
|
| Conversion price: | C$40.125
|
| Conversion premium: | 25%
|
| Call: | After three years
|
| Warrants: | No
|
| Investor: | Paulson & Co. Inc. (for at least $230 million)
|
| Pricing date: | Nov. 12
|
| Settlement date: | Nov. 29
|
| Stock symbol: | Toronto: DGC
|
| Stock price: | C$32.48 at close Nov. 12
|
| Market capitalization: | C$2.7 billion
|
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