Queenston raises $18M for gold exploration

Queenston Mining (QMI-T) has big spending plans for the Kirkland Lake gold camp in Northwestern Ontario, where it’s developing four gold deposits.

The company will increase its treasury total to $30 million with the help of an $18-million financing that’s expected to close in early March.

Primary Capital is leading a syndicate of underwriters that includes Dundee Securities and National Bank Financial. They have agreed to do a combination  bought-deal financing and a best efforts raising.

The group has agreed to buy $10 million in hard-dollar units and flow-through shares and to raise another $8 million on a best efforts basis.

Each hard dollar unit is priced at $3.85 per share and will consist of one share and one half warrant. A full warrant will allow the holder to buy one more Queenston share for $5 for a 12-month period from the closing date. Flow-through shares are being priced at $4.40 per share.

Queenston hopes to bring its four gold deposits in Gauthier Township into production. The company says it would build a mill on the Upper Canada site that would be accessible from all of the deposits.

Queenston also has five joint ventures with Kirkland Lake Gold (KGI-T, KGI-L) next to the Macassa mine in Teck Township.

Queenston plans to beef up its exploration programs with the extra cash. Some recent deep drilling has returned some positive results.

In December, the company reported a 20.8-metre intercept grading 30.3 grams gold per tonne and 1% copper at the Upper Beaver property. The property is home to a mine that produced 140,000 oz. gold and 11.9 million lbs. copper over 50 years before it closed down in 1972.

The Upper Beaver deposit has an indicated resource of 1.37 million tonnes grading 8.5 grams gold per tonne and 0.43% copper for 375,000 oz. gold. Inferred resources stand at 1.06 million tonnes grading 7.7 grams gold per tonne and 0.3% copper for 262,800 oz. gold.

In January Queenston announced drill results from the McBean property that included a 5.2-metre intersection grading 15.4 grams gold per tonne.

And in February, drill results from the AK property included 2.3 metres grading 31.8 grams gold per tonne.