Allied Nevada to raise capital for developing Hycroft Mine

Allied Nevada Gold Corp., a new player in the state's mining scene, plans to raise about $14 million to develop a well-known property.

The Sparks-based company, whose publicly held stock is traded on the Toronto and American exchanges, said last week it expects to raise the capital through the sale of common stock and warrants to purchase additional shares of its stock.

The private placement will be priced at $15 million in Canadian dollars, or about $14 million in U.S. dollars at last week's exchange rate.

Allied Nevada won't use a broker for the sale, but instead will pay a 5 percent finder's fee along with warrants to buy its shares to anyone who lines up eligible purchasers.

The company's chairman, Robert Buchan, has said he'll sign up for $4 million of the deal.

Allied Nevada said it plans to use much of the new capital to develop the Hycroft Mine about 54 miles west of Winnemucca.

The mine, which hasn't been in operation since 1998, produced more than 1 million ounces of gold during an 11-year life. Remaining reserves are estimated at 539,000 ounces.

Allied Nevada acquired the mine from Denver-based Vista Gold as part of a deal that combined some of Vista's holdings with exploration properties owned by Carl and Janet Pescio of Elko to create the new company.

Carl Pescio, a geologist and prospector, had developed the largest individually owned group of mining claims in the state before it was folded into Allied Nevada.

The company's stock was selling last week at $4.09 a share, close to the bottom of its range since it started trading in May.