Rio Alto Mining Limited (CVE:RIO) (PINK:RIOAF) stock price is breaking up on an increased trading activity as the company remains surrounded by positive developments and optimistic investor sentiment.
RIO share price is up 8.3% from Thursday under a heavy and increasing trading volume of 1.99 million, which was three times larger than the average 661 thousand. The price sticks to the short-term uptrend which is in play for nearly a month now.
The increase in trading activity was induced by the recently announced appointment of Ram Ramachandran to the board of directors. According to the press release, Mr. Ramachandran holds 25 years of experience in financial reporting and regulatory matters. Rio has already granted him options to purchase 180 thousand of common shares at the price of $2.15.
The general uptrend in the price is also coming along with a reason. The company is currently in transition period from mine development to gold production. They work on expanding production capacity with a target of 24 thousand tons per day of ore by January 2012.
The business is adequately funded to pursue their goals. On April 19, 2011 Rio drew down $19.5 million under the Gold Prepayment agreement with Red Kite Explorer Trust. The financing should not hurt shareholders, the company said they will deliver 36 thousand ounces starting July this year to settle the Prepaynment facility.
Payment will consist of 564 ounces per month till October 2012 and 1,124 ounces per month afterwards till October 2014. The repayment would cut their production around 6%.
On May 6, 2011, Rio had the first gold pout at the La Arena Gold Oxide Mine. Commercial production is expected in Q3 2011 and should reach around 75 thousand ounces for 2011.
