IAMGOLD Corp (USA) (NYSE:IAG) has revealed on Monday that it has entered into a purchase agreement with underwriters, led by Morgan Stanley Canada Ltd., National Bank Financial, Inc., and TD Securities, Inc. The underwriters are entitled to the acquisition of 38.85 million of IAMGOLD shares at $5.15 each.

The underwriters have been granted a 30-day option to purchase a maximum of about 5.83 million additional shares.

Subject to regulatory requirements and other closing conditions, the offering is expected to expire on or about Tuesday.

Purpose of Net Proceeds

Should the option be exercised entirely, IAMGOLD is expecting about $230 million in aggregate gross proceeds.

The company intends to use the net proceeds from the agreement for the strengthening of its balance sheet while minimizing debts, supporting long-term growth prospects.

Specifically, about $150 million will be allotted for the outstanding 6.75% senior notes tender offer. The remaining amount will be used for internal growth projects such as the Sadiola mine expansion.

Cash Tender Offer

On Monday, IAMGOLD has also issued a cash tender offer of a maximum of $150 million in aggregate principal amount, which may further be subject to any increase deemed by the company, for the outstanding 6.75% senior notes due by 2020.

The cash tender offer will expire on September 2 unless an extension or early expiration has been determined prior the said date. Meanwhile, the early tender deadline is on August 19, which may also be subject to extension.

A total consideration of $970 for each principal amount of $1,000 has been approved. This includes an early tender payment of $30 per principal amount of $1,000. Holders who wish to be entitled to their respective early tender payments must validly tender their senior notes on or before the early tender date.

For this cash tender offer, Citigroup Global Markets, Inc. is acting as the dealer manager while Global Bondholder Services Corp. is acting as the information and tender agent.

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