Allied Nevada Gold Corp., the operator of the Hycroft mine in Nevada, slumped the most since its initial public offering seven years ago after a heavily discounted sale of shares and stock warrants raised $21.5 million.
The stock tumbled 33 percent to close at 93 cents in New York.
Allied Nevada has struggled to turn a profit at Hycroft. Last week the company cut its gold and silver sales forecast for 2014 after encountering difficult mining conditions at the mine. It’s also running low on funds, with just $1.3 million of cash and cash equivalents at the end of November. It has market capitalization of $101 million, down from more than $3 billion in 2012.
The stock sale was priced at $1 share, the Reno, Nevada-based company said today in a statement. Investors will also receive one half warrant with each share. A whole warrant entitles the holder to buy one share at an exercise price of $1.10 for five years.
HC Wainwright & Co. was the sole lead placement agent in U.S., Canaccord Genuity Corp. was co-placement agent in Canada.
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