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Junior gold miner Allied Nevada Gold Corp. (NYSEMKT: ANV) announced this morning the purchase of 14 million shares of the company’s common stock by a syndicate of underwriters led by Dundee Securities and including Cormark Securities. Shares were priced at $10.75 and the underwriters have an overallotment option on an additional 2.1 million shares at the same price. Including the option, Allied Nevada expects to raise $173.08 million.

The company plans to use the proceeds from the purchase to fund capex at its Hycroft Mine near Winnemucca, Nevada, and for general corporate purposes. The mine is expected to produce 225,000 to 250,000 ounces of gold in 2013 and 1.5 million to 1.8 million ounces of silver. Production will be heavier in the second half of the year, and full-year cash costs are expected in the range of $565 to $585 per ounce of gold. Silver is produced on a byproduct basis.

Needless to say, existing shareholders were underwhelmed by the announcement. Allied Nevada’s shares closed at $11.83 last night, so today’s sale shaved about 10% off existing shareholders’ value.

Shares are trading at $10.37 in the late morning, down 12.3% in a 52-week range of $10.20 to $41.02.