Tower Hill raises $22M; Paulson executive to serve as chairman

International Tower Hill Mines Ltd. Dec. 28 closed a US$22 million financing that involved the issuance of 45.83 million shares at US48 cents each. As a result of the financing, Paulson & Co. Inc., Tocqueville Asset Management, L.P. and AngloGold Ashanti (U.S.A.) Exploration Inc. own 34.2 percent, 19.7 percent and 9.5 percent of International Tower Hill Mines shares, respectively.

Tower Hill intends to use the net proceeds from the financing to make a roughly US$14.7 million final payment due in January on certain claims associated with its Livengood gold project; additional optimization studies to further improve and de-risk the Interior Alaska project; continue environmental baseline studies; and for general working capital purposes.

In September, Tower Hill released results of an initial phase of optimization work in a pre-feasibility study for Livengood, which is about 70 road miles northwest of Fairbanks, Alaska.

The mine contemplated in the PFS involves a 52,600-metric-ton-per-day mill (about half the size envisioned in a feasibility study released in 2013) that would produce 6.8 million ounces of gold over a 23-year mine life, or roughly 294,100 oz annually.

Thanks to reduced capital and operating costs, the all-in cost to produce an ounce of gold at Livengood is now estimated to be US$1,263/oz, roughly 16 percent lower than the US$1,503/oz calculated for the mine considered in the 2013 study.

In connection with the financing, Marcelo Kim, a partner at Paulson & Co., has been chosen to serve as Tower Hill chairman.

Kim, who oversees global natural resource investments for Paulson and Co., received a bachelor's in economics from Yale University and currently also sits on the board of directors of Midas Gold Corp.

"We are excited to continue our partnership with ITH, owner of one of the largest gold reserves in North America not owned by a major company," said Kim. "In addition to its low strip ratio, minimal infrastructure requirements, and excellent jurisdiction, there are a number of opportunities that could further improve the economics for the Livengood project. Going forward, we will work to optimize both the capital and operating expenses of what we believe one day will become one of North America's most profitable gold mines."

In addition to Kim, Paulson & Co. has the right to nominate a second individual to stand for election to the board of directors at Tower Hill's next annual shareholders meeting.

Steve Lang, who has served as Tower Hill chairman since 2014, has been appointed as the lead independent director for the company.

-SHANE LASLEY