Highgold Mining Inc. [HIGH-TSXV] on Friday announced details of a $9.3 million bought deal private placement financing that will be used to fund on-going exploration and development at the company’s property portfolio.
News of the financing comes just days after Highgold released highly impressive drilling results from its flagship Johnson Tract gold (copper-zinc) property in south-central Alaska. Assay results from the first two holes of a nine-hole drill program include 107.8 metres of 19.55 g/t gold equivalent in drill hole JT19-082.
On Friday, Highgold said Sprott Capital Partners LP will lead a syndicate of underwriters who have agreed to purchase $9.3 million worth of securities in the company on a bought deal basis. The offering will consist of a combination of 1.28 million common shares to be issued on a flow-through basis at $1.80 per share, and 5.6 million common shares at $1.25 per share.
In addition, the underwriters have been granted a green shoe option to increase the size of the offering by up to an additional 20% of the offered securities. They can exercise that option at any time up to three business days prior to the closing of the offering.
On Friday, Highgold shares eased 1.5% or $0.02 to $1.33. The shares are currently trading in a 52-week range of 78 cents and $1.89.
Highgold is a mineral exploration company with a focus on high-grade gold projects in North America. In addition to Johnson Tract, the company has a portfolio of gold projects in the Timmins, Ont., region.
The Johnson Tract Project is an advanced stage poly-metallic (gold, copper, zinc, silver lead) project located near tidewater. Highgold holds a 100% interest in the project covering 8,475 hectares under a lease agreement with the Cook Inlet Region, Inc. (CIRI). The agreement includes the Johnson Tract deposit and gives CIRI certain back-in rights.
CIRI is one of 12-land based Alaska Native Regional Corporations created by the Alaska Native Claims Settlement Act of 1971. It is owned by approximately 9,000 shareholders of Alaska Native descent and is south central Alaska’s largest private landowner.
The Johnson Tract deposit was drilled by previous operators in 1982 and 1993. In 1982 Anaconda Minerals reported 108.6 metres of grade 10.39 g/t gold, 7.64% zinc, 0.71% copper, 2.01% lead, and 8.1 g/t silver, including 48 metres grading 21.1 g/t gold, 9.93% zinc, 0.88% copper, 2.86% lead and 12.3 g/t silver.
Hole JT19-082, drilled by Highgold, is the first new drill hole completed on this property in 25 years. It was designed as a twin of historic drill hole JT93-065 for validation purposes for future resource estimation. Historic drill hole JR93-065 returned 99.7 metres of 16.95 g/t gold equivalent.
Highland said the six-week drill program included nine core holes for a total of 2,247 metres of diamond drilling within the JT deposit. The main objectives were to confirm, better define and expand the JT deposit. Hole JT19-082, although designed to twin historic hole JT93-065, cuts the deeper, higher-grade portion of the known zone.
HIghgold plans to use the new drill data in combination with the validated historic drill data to generate an initial NI 43-101 compliant mineral resource for Johnson. Assay results for the remaining seven holes are pending.