Gold Eagle in $80 million bought deal financing

Vancouver- Gold Eagle Mines (GEA-T, GEAFF-O) is raising $80 million from a bought deal financing to fund ongoing exploration at its Bruce Channel discovery near Red Lake, Ont.

That money is being raised from the sale of 8.9 million common shares of Gold Eagle to an underwriting syndicate for $9 a share, on a bought deal basis.

The syndicate, led by Orion Securities, has been granted an over-allotment option to purchase an additional 1.3 million shares, at the same price, for a period of 30 days after closing of the financing.

Gold Eagle shares rose 11 to $9.15, March 28, the same day that the financing was announced.

The product of a merger between Exall Resources, and Southern Star Resources, the company is exploring on Red Lake property that houses the former Gold Eagle mine.

The property is located along the Red Lake trend, west of Goldcorps (G-T, G-N) Red Lake, and Campbell mines, and immediately southwest of Goldcorps Cochenour-Willans mine.

The project found its way back into the spotlight in 2005 with the discovery of the Western Discovery zone. And on the heels of that find came another: the promising high-grade Bruce Channel zone.

Drilling to date has consistently intersected vein hosted high-grade gold values and extensive gold-rich sulphide zones with brecciated structures, the company said.

The Bruce Channel mineralized envelope measures 450 by 615 metres and so far extends 1,100 metres below surface. It remains open in all directions, and Gold Eagle continues to drill it.

Last month, Gold Eagle said the 2007 exploration program for Bruce Channel will consist of over 25,000 metres of drilling to test the dimensions of the mineralized envelope.