LionOre eyes $12 million

Australia’s LionOre Mining International (LIM-T) has retained HaywoodSecurities to help it raise up to $12 million, on a best-efforts basis,through a private placement of special warrants exchangeable for unsecureddebentures and share purchase warrants.

Each special warrant will cost $1,000 and will be exchangeable, withoutfurther consideration, for one unit comprising a $1,000 principal amount ofunsecured debentures and 110 share purchase warrants. The number of purchasewarrants included in each unit will increase to 150 if LionOre does notreceive a receipt for a final prospectus, with respect to the debentures andwarrants, within 75 days of closing of the private placement.

The debentures will have a term of three years and a 12% coupon rate.Each warrant will be exercisable at $2 for one LionOre share for three yearsfollowing closing.

The proposed financing is subject to regulatory approval and completionof definitive documentation.

The private placement is slated to wrap up in mid-June. The proceeds areearmarked for general corporate purposes and project development.

Last month, a group led by LionOre discovered the Snapper gold prospect,7 km south of the company’s Thunderbox gold deposit in Western Australia’snortheastern goldfields.

The prospect lies on the Wilson Creek joint-venture tenements, which areheld by the Wildara Joint Venturers (LionOre 60%, Dalrymple 40%) and PacMinMining, a 79%-owned, Australian-listed subsidiary of Teck (TEK-T).

Reconnaissance rotary-air-blast drilling cut significant goldmineralization at shallow depths in three holes about 80 metres apart. Theholes yielded:

• Hole 428 — 32 metres grading 8.2 grams gold per tonne;
• Hole 429 — 16 metres of 2.13 grams gold; and
• Hole 430 — 6 metres of 1.1 grams gold.

Mineralization occurs in an oxide zone that is 160-200 metres wide. Its truewidth and configuration are not yet known.

Follow-up drilling is planned.

LionOre and Dalrymple can earn a 51% interest (LionOre, 31%, Dalrymple,20%) in the Wilson Creek project by spending A$700,000 over three years.They can boost that to 70% (LionOre, 42%, Dalrymple, 28%) by spendinganother A$1.5 million over the subsequent three years.

After LionOre and Dalrymple have earned their 70% interest, PacMin canelect to claw back to 49% by solely funding the next A$4.5 million overthree years.