Queenston aims higher

An unexpectedly high demand for its paper has prompted Queenston Mining (QMI-T) to increase the size of a private share offering.

The Toronto-based company is now offering 6.25 million units priced at 80 apiece, or $5 million worth of scrip. The offer was originally capped at $4 million worth of units.

Half of the units can be exchanged for common shares and the other half for flow-through shares. Each unit includes half a purchase warrant, with a full warrant entitling the holder to purchase a common share within 18 months of the deal’s closing, at 95.

The closing date is still set for mid-July, and the underwriters remain the same. National Bank Financial is the lead underwriter.

Queenston will use the funds to purchase Newmont Capital’s half-stake in their Kirkland Lake joint venture and to fund ongoing exploration in that region of northern Ontario and at the Lake Abitibi gold project, about 80 km to the north.

Queenston can acquire Newmont’s half-stake for $3 million in cash and $865,500 worth of treasury shares. In return, the junior gains full control of 713 claims covering 11,500 ha, an office-warehouse and a mill-tailings complex.

Previous exploration on the property led to the discovery of numerous showings and five deposits, namely Upper Canada, McBean, Anoki, AK and 180 East. Combined, the deposits host measured and indicated resources of 4.13 million tonnes grading 5.6 grams gold per tonne, and inferred resources of 4.47 million tonnes at a grade of 5.3 grams gold.

Diamond drilling is scheduled to begin once the deal is closed. Eight targets have already been targeted.

The Lake Abitibi gold property consists of 854 claims covering 13,800 ha, situated 80 km north of the town of Kirkland Lake. There too, gold is the target.

Queenston is in the midst of a 7-hole, 2,500-metre drill program aimed at testing five anomalies outlined by earlier geophysical and till sampling surveys. The targets may reflect volcanic and porphyry-hosted quartz-carbonate gold-bearing systems formed by fluids travelling along a regional deformation structure that cuts through the property.