Vancouver — Northgate Exploration (NGX-T) has closed two special warrant financings worth $25.4 million. The transactions are the first part of a $140 million financing aimed at strengthening the company’s financial position as well as funding its Kemess North exploration project in north central B.C.
About $20 million was raised through the issue of 15.8 million special warrants priced at $1.26 per unit. Each warrant comprised one common share plus half a common share purchase warrant. An additional $5.4 million was raised through the issue of 3.8 million flow-through common share special warrants priced at $1.40 per unit. Each unit consists of one flow-through common share.
Two additional transactions, a $25 million rights offering to Northgate’s current common shareholders and a private placement to Trilon Financial of $90 million worth of convertible preferred shares are still in the works. The entire financing is expected to wrap up by the second quarter of 2002.
Kemess North, which is 7 km north of the Kemess South gold-copper mine, hosts a resource of 442 million tonnes grading 0.4 gram gold per tonne and 0.23% copper. This calculation is based on a gold-equivalent cutoff grade of 0.6 gram gold per tonne and on gold and copper prices of US$325 per oz. and US90 per lb., respectively. The deposit hosts a higher-grade core of 170 million tonnes grading 0.5 gram gold and 0.29% copper, based on a cutoff grade of 0.6 gram gold.
Reserves at Kemess South are pegged at 145.9 million tonnes grading 0.65 gram gold per tonne and 0.24% copper. This year, Northgate hopes to produce a total of 275,000 oz. gold and 30,390 tonnes copper at a cash cost of US$200 per oz. gold (net of byproduct credits).
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