Under a bought deal, the units are priced at $3.10 apiece. One unit comprises one share and half a warrant. A full warrant is good for one share at $3.75 per share for one year from closing. The exercise period is trimmed by three months if Cumberland’s shares average at least $4.25 per share over any 20-day period between four and eight months after closing.
The underwriting group, led by Canaccord Capital and Dundee Securities, will sell 1 million flow-through shares at $3.30 each on a best-efforts basis.
The group can boost the financing by up to 3 million units until closing, which is expected to be July 29.
As a commission, the underwriters will take home 5% of the gross proceeds generated by the financing. The group will also receive broker warrants (priced at $3.10 per share) representing 5% of the total number of units and flow-through shares sold.
Cumberland will use the proceeds to advance its Meadowbank project, 70 km north of Baker Lake, where an ongoing feasibility study is expected to wrap up later this year.
A preliminary assessment of the Meadowbank deposits suggests production of 250,000 oz. gold per year at a cash cost of US$168 per oz. over eight years. About 85% of the production would be mined from open pits.
A $10.5-million program of engineering, resource definition, exploration drilling, and environmental studies continues.
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