Metallic Minerals Corp. [MMG-TSXV; MMNGF-OTC] on Monday September 30 said it is raising $2.75 million from a non-brokered private placement financing that is backed by Bay Street gold bug Eric Sprott.
Metallic Minerals is a growth stage exploration company focused on the acquisition and development of high-grade silver and gold projects in the Yukon within underexplored districts.
Its flagship Keno Silver Project is located in the historic Keno Hill Silver District, an area that has produced over 200 million ounces of silver.
Under the terms of the financing, Metallic is issuing 12.5 million flow-through units at a price of 22 cents per unit. Each unit consists of one common share and one-half of one common share purchase warrant. Each whole is good to buy one share at an exercise price of $0.25 for 24 months from the closing date of the private placement.
On Monday, Metallic shares eased 2.5% or $0.005 to 19.5 cents. The shares are trading in a 52-week range of 11 cents and 25 cents.
Upon completion of the financing, Eric Sprott will hold a 13% interest in the company on a non-diluted basis and 19% on a partially diluted basis. Net proceeds are earmarked for exploration on the Keno Project.
“With these funds, we are well positioned to continue our exciting work at Keno as well as our recently acquired La Plata silver-gold-copper project [in southwest Colorado], both of which we believe have excellent potential to be quickly advanced to the resource stage,” said Metallic CEO Greg Johnson.
The Keno Project lies adjacent to Alexco Resource Corp.’s [AXR-TSX; AXU-NYSE] United Keno Hill Mine site, which ranks as Canada’s second largest producer of silver, behind Cobalt, Ontario. After a five-year pause, Alexco is getting ready to put United Keno Hill back into production.
Metallic Minerals’ land package covers the eastern portion of the district, along with portions of the western and southern sides, and represents a continuation of the same geological structures and host rock associated with mineralization on Alexco’s ground to the west.
The Keno Silver Project was host to eight historic silver mines with some of the highest grades in the district and five that had average production grades above 5,000 grams per tonne.
However, the eastern portion of the district has seen little modern exploration due to the longstanding, fragmented, private land ownership structure, which has now been largely consolidated by Metallic Minerals.
Still, there are 12 known mineralized trends in the Keno Hill Silver District, eight of which continue through the eastern portion of the district, which hosts Metallic’s Keno silver project.
Prior to commencing drilling last year, the company’s technical team reviewed decades of modern geological data in a bid to establish priority exploration targets.
The company has said more recent work has shown that the advanced Caribou, Duncan and Gold Hill drill targets [in the project’s Keno Summit area] form part of a much larger structural corridor that includes the historic Keno Hill mine and that is comparable in structural expression to the +100 million-ounce Bermingham-Calumet system in the more extensively explored Galena Hill area in the West Keno Hill Silver District.
“The Central Keno District shows excellent potential for the continued expansion of areas of known silver mineralization and for new discoveries from our surface exploration work and reconnaissance drilling,” Johnson said in an August 14, 2019 press release. “This will be an important priority area of focus and follow-up work for exploration in 2019,” he said.
In a September 10, 2019, news release, Metallic said it has struck a deal to acquire a 100% interest in the La Plata silver-gold-copper property from two private vendors. It said the property holds a large-scale precious metals-rich porphyry system with associated high-grade silver and gold epithermal deposits.