A private placement of 4 million special warrants at $2 each will provide Rea Gold (TSE) with additional funds to continue work at its Bissett gold project in Manitoba.
Underwriters Goepel Shields & Nesbitt Burns have an option to place an additional 1 million special warrants at the same price through May 26.
Each special warrant converts into one common share at no additional cost.
Over the past two years, Rea Gold has started up two heap-leach gold mines in Nevada: Mt. Hamilton, which is wholly owned, and South Comstock, of which Rea owns 50%.
The company expects to produce 54,000 oz. gold at Mt. Hamilton in 1995 and is in the permitting stage for a second phase of leaching at South Comstock.
Rea is also working to develop its Bissett underground mine, which contains a minable reserve of almost 2 million tons grading 0.21 oz. gold per ton.
An internal feasibility study estimates the capital cost of restarting the operation would be $30 million, and this would entail doubling the daily capacity of the existing mill to 1,000 tons.
Consulting firm HA Simons is conducting an independent feasibility study on the Bissett mine.
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