Vancouver —
The financing was led by Toronto-based Octagon Capital and consists of 3.7 million units priced at $1.70 apiece for total proceeds of $6.4 million. A unit consists of one share and half a share purchase warrant. Each whole warrant can be exercised at any time for two years from the closing date to acquire one share for $2.15.
Meanwhile, an agreement between Minco and the Chinese company Baiyin Non-Ferrous Metal Corp. (Baiyin) has been amended in order to stop the earn-in process at the White Silver Mountain project, in Gansu province. Minco has so far earned a 61% equity interest in the project and will not spend any more money until base metal prices improve.
Baiyin and Minco have agreed to focus on other precious metal projects in China, specifically the Anba gold property. In early November, Minco signed several agreements with the provincial government of Gansu and two other companies to acquire a 40% equity interest in Yangshan Gold Mining (YGM), which, in turn, will acquire a 100% interest in Anba. YGM will acquire the full interest for US$6 million, and is required to make an initial payment of 40%, or about US$2.4 million. The remaining 60%, or US$3.6 million, will be paid over five years.
Minco, or rather, a subsidiary of Minco, will be the largest shareholder in YGM and have the right to appoint a president.
Anba is in the Yangshan Gold Field, in the central part of the Qinling gold belt. The region hosts numerous Carlin-style gold deposits with total proven gold resources equivalent to more than 16 million oz.
Gold mineralization occurs in two principal vein groups and is hosted in granite porphyry and calcareous phylite. Total resources, based on grid drilling and trenching, are pegged at 16.1 million tonnes averaging 5.64 grams gold per tonne.
Minco recently inked a deal with No. 2 Exploration Institute of the Gansu Bureau of Geological Exploration (GBGE) for exploration and development of mineral resources in the province’s southern region.
Minco and GBGE intend to establish a Sino-foreign joint-venture company to explore for gold in three areas held by the latter: Guanniuwan, Hongyanggou and Guojiagou. Minco can earn a 75% equity interest in all three projects through the joint venture. Total initial investment will be about US$960,000, of which 75% will be contributed by Minco and 25%, by GBGE.
Guanniuwan, Hongyanggou and Guojiagou are all in the Yangshan gold field. The Guanniuwan licence area covers the western strike extension of the Anba gold deposit and the eastern strike extension of the Xinguan gold area, to the west. Xinguan includes a resource of 550,000 oz. gold averaging 4.67 grams gold. This resource is specifically excluded from Minco’s licence. Guanniuwan is between these two areas, in the centre of a large, 100-sq.-km regional geochemical gold anomaly. The Hongyanggou area is north of Xinguan and hosts part of a major geochemical gold anomaly. Initial, early-stage field investigation by the existing owners resulted in the discovery of two previously unknown gold showings on the property. No further exploration work has been done since GBGE shifted all its exploration efforts to the Xinguan gold deposit itself.
The Guojiagou is on the northeastern part of the Yangshan gold field. Strong geochemical gold, lead, zinc and silver anomalies were defined during stream-sediment sampling. Subsequent soil sampling led to the discovery of a gold zone 6-7 metres wide with samples averaging 10 grams gold per tonne.
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