Ashton boosts offering to $8m

Higher-than-expected demand for a $3-million brokered flow-through financing priced at a $1.10 per unit has led Ashton Mining of Canada (ACA-T) to raise an additional $1 million under the same terms.

Also, London-based Rio Tinto (RTP-N), which had been shopping around its controlling stake in Ashton, has agreed to subscribe to 3.6 million units at $1.10, for additional proceeds of $4 million. (Rio also took down a $2-million financing in Ashton in August.)

The brokered financing, led by Canaccord Capital and Haywood Securities, consists of one flow-through share and a half warrant. A full warrant can be exercised not later than June 30, 2002, to buy an additional flow-through share at $1.40.

Each unit issued to Rio will consist of one common share and 1.25 warrants, with one warrant entitling the holder to buy an additional share at $1.40.

Rio Tinto has advised Ashton that it now “intends to review all of the available options for its beneficial shareholding in the corporation.” This statement has been interpreted by several analysts to mean that Rio has taken the “for sale” sign out of the window. Rio’s decision comes in light of recent kimberlite discoveries by Ashton and Kennecott Canada Exploration south of Coronation Bay in Nunavut — discoveries that have yielded significant early-stage microdiamond counts.

The major picked up a 67% controlling stake in Ashton through last year’s takeover of its parent company, Ashton Mining. The Australian company is Rio’s joint-venture partner in the Argyle diamond mine in Western Australia. The Rio group already explores for diamonds in Canada through its wholly owned subsidiary, Kennecott Canada Exploration.

In related news, Pure Gold Minerals (PUG-T) has arranged for the sale of up to 5 million flow-through shares to arm’s-length parties at 10 per share, for gross proceeds of $500,000. Pure Gold is a joint-venture partner of Ashton in the Slave region, with holdings covering 1,750 sq. km in the emerging Coronation Bay kimberlite camp. Ashton has a 90% interest, with the remainder held by Pure Gold.