Major financings continue to roll (May 11, 2006)

Vancouver – Abundant cash remains available to mineral explorers and developers in this resiliently strong resource market, as evidenced by a quintet of recent financing by Blue Note Metals (BNT-V), Fronteer Development Group (FRG-T, FRG-X), Century Mining (CMM-V, CMNZF-O), Starfield Resources (SRU-V, SRFDF-O) and Pinnacle Mines (PNL-V, PNMLF-O).

Blue Note Metals closed a $75-million brokered private placement financing consisting of 50-million units at $1.50 apiece. Units are comprised of one common share at 30 each plus four subscription receipts at 30 each, with each receipt exchangeable for a common share subject to the company’s successful acquisition of the Caribou and Restigouche lead-zinc mines near Bathurst, New Brunswick.

Caribou and Restigouche host proven and probable reserves of 5 million tonnes averaging 6.5% zinc, 3.4% lead and 85 grams silver per tonne plus additional inferred reserves of 2.3 million tonnes of 6.7% zinc, 2.9% lead and 92 grams silver. Caribou is a past producing underground operation and includes a 3,000-tonne-per-day mill complex and permitted tailings pond. Restigouche is an open pit operation also under care and maintenance.

On the heels of Teck Cominco’s (TEK.SV.B-T) back-in on its Turkish gold deposits, Fronteer Development lined up a $38.4 million bought deal financing. A syndicate of underwriters will purchase 6 million shares at $6.40 apiece. The company will use the funds on its projects in Turkey, Mexico and the Yukon, as well as on possible new acquisitions.

Strong market demand saw Century Mining’s $25-million financing oversubscribed by a couple hundred thousand dollars. The non-brokered private placement had the company sell over 20 million units at $1.25 each, with units comprised of one share plus a half-warrant. Warrants are exercisable at $2.00 for two years but can be forced within 10 days should the share price average over $2.25 over 20 days. The financing included a number of institutional investors.

Century Mining will earmark funds towards new equipment at its Sigma gold mine in the Val d’Or area of northwestern Quebec, to redevelop the nearby Lamaque deposit and towards its recently acquired San Juan gold mine in southern Peru.

Starfield Resources has closed the first tranche of $14.3 million in a planned $16.6-million private placement offering. The financing will see the company sell units (share plus one-half a transferable warrant) at 53 apiece and flow-through common shares at 65 each. The funds will be used for further exploration and development of its Ferguson Lake copper-nickel-cobalt-PGM massive sulphide deposit in Nunavut.

Ferguson Lake hosts an indicated resource of 8.7 million tonnes grading 0.93% copper, 0.67% nickel, 0.08% cobalt, 1.5 grams palladium per tonne and 0.2 gram platinum per tonne in the Pit Area West Zone, using a 1% copper plus nickel cutoff grade. Inferred resources of 66.1 million tonnes at 1% copper, 0.6% nickel, 0.07% cobalt, 1.4 grams palladium and 0.25 gram platinum was also reviewed in all zones using the same cutoff grade.

Pinnacle Mines has arranged a $6.9-million financing comprised of 6 million units at $1.15 each. Funds will be allocated towards exploration and development of its mineral projects and possible new acquisitions. The company has commenced this year’s exploration program at its Silver Coin gold-silver-base metal project, near Stewart in northwestern British Columbia, where drilling is aimed at expanding the recently defined resource of 11.3 million tonnes of 1.6 grams gold per tonne and 6.6 grams silver.

Since the beginning of the year about $1.5 billion in equity financings have been completed in the Canadian mining sector, leading to a robust number of well financed companies geared for active exploration and development programs.