Hope Bay raises $2 million

Hope Bay Gold (HGC-T) has raised $2 million through the private placement of 4.9 million units priced at 41 each. A unit consists of one share and one warrant, with a warrant entitling the holder to an additional share, at 55, within one year.

Resource Capital Fund, an investment fund managed by the Rothschild family, bought the units.

A portion of the proceeds will be applied to the Hope Bay gold project in Nunavut. The junior owns a half-interest in the project, with Miramar Mining (mae-t) holding the remainder.

The pair recently completed an underground work program at the Boston deposit, where resources are pegged at 5.7 million tonnes grading 13.1 grams gold per tonne. In the process, they identified three higher-grade trends, one of which (the B2 zone) yielded 185 grams over 4 metres, 151 grams over 3.4 metres and 75.4 grams over 7.2 metres.

In related news, Hope Bay Gold and Dundee Precious Metals are forgoing their merger proposal. Instead, Dundee will convert an outstanding $6-million loan for 12 million shares and an equivalent number of warrants. This, in turn, cancels an earlier right to convert the loan to a 3.5% net smelter return roylalty on Hope Bay’s portion of the Hope Bay project.

As part of the deal, Dundee is to arrange for 2.5 million units of Hope Bay to be placed privately at 50 each. A unit consists of one share and one warrant, which can be exchanged for a share at 65 until Jan. 31, 2001. The agreement is subject to board and regulatory approval.