Marathon Gold (TSE: MOZ) has announced a C$30 million (upsized from C$26 million) bought deal – net proceeds are intended for permitting, development and exploration at its Valentine gold project in Newfoundland.
The syndicate of underwriters is co-led by Canaccord Genuity, Sprott Capital Partners and RBC Capital Markets; the underwriters have agreed to purchase 20 million units at $1.50 per unit for gross proceeds of C$30 million. Each unit consists of one Marathon share and half of a warrant.
The underwriters have an additional option to purchase up to a further 3 million units at $1.50 per unit for gross proceeds of $4.5 million, exerciseable at any time for 30 days following closing of the transaction, which is expected around May 26.
The underwriters have agreed to purchase 20 million units at $1.50 per unit for gross proceeds of C$30 million
In April, Marathon released the results of a feasibility study on its wholly owned Valentine gold project, which outlined a 12-year open pit mine, producing an average of 175,000 oz. of gold annually in the first nine years of operation.
With an initial capital cost of C$272 million and average life-of-mine, all-in sustaining costs of $739 per oz., the net present value estimate for the project, at a 5% discount rate, came in at $472 million with a 36% internal rate of return.
(This article first appeared in the Canadian Mining Journal)