Rainy River cashes in with $75 million financing

On the back of its flagship 5-million-oz. Rainy River project in northwestern Ontario, Rainy River Resources (RR-V) has closed a $75-million bought deal financing just as gold is starting to lose a little of its lustre.

The private placement, consisting of 5.9 million shares priced at $12.65 apiece, was taken down by a syndicate of underwriters led by Scotia Capital, and including Wellington West Capital Markets, RBC Dominion Securities, NCP Northland Capital Partners, UBS Securities Canada, Canaccord Genuity and BMO Nesbitt Burns.

The net proceeds of the offering, together with cash on hand, boosts Rainy River’s treasury to $138 million, putting the company on a strong financial footing to fund ongoing advanced exploration activities at its Rainy River project.

Since acquiring a 100% interest in the Rainy River project in 2005, the company has added to the existing and partially define 17 and 433 gold zones by discovering the Beaver Pond, South, Cap and ODM zones, as well as the downdip extensions to the 433 and ODM zones.

To the end of Sept. 30, 2010, the company had drilled a total of 824 core holes totalling 352,000 metres on the Rainy River project.

A 43-101 compliant resource estimate by SRK Consulting, released in March 2010, showed indicated resources totalling 2.4 million oz. gold, based on 56.8 million tonnes grading 1.3 grams gold per tonne and 1.81 grams silver. Inferred resources contain an additional 2.7 million oz. gold in 68.9 million tonnes averaging 1.2 grams gold and 2.73 grams silver.

Rainy River is carrying out a preliminary scoping study on open-pit and underground mining options, which it expects will be completed following the planned release of an updated resource estimate in the first quarter of 2011. The company completed upwards of 90,000 metres of additional drilling in 2010.

Exploration costs for the fiscal year ended Sept. 30, 2010, totalled $19 million. The company’s budget for 2011 contemplates a similar level of drilling, focusing on existing exploration targets close to the defined zones.

With an advanced exploration permit application already in the works; Rainy River is making plans to go underground by mid-year, with a 2,300-metre-long decline ramp that will be used to collect bulk samples of the deposit. It will also be used to test ground conditions and develop optimal mining methods, and to support deeper exploration. The deepest drill intersection to date returned 11.5 grams gold across 3 metres at about 1,300 metres below surface.

The Rainy River gold project is in the Richardson Township, 50 km northwest of Fort Frances in western Ontario.

Rainy River also has an option to earn a 51% interest in the eastern half of Northern Superior Resources‘ (SUP-V) Ti-pa-haa-kaa-ning (TPK) project, 190 km northeast of Pickle Lake.

The joint-venture recently announced the discovery of significant gold-bearing mineralization during the initial phase of core drilling on Target 3. The fourth hole of a 10-hole program intersected 13.5 metres averaging 25.9 grams, starting from a downhole depth of 149 metres.

The companies are currently conducting an 80-line-km ground geophysical survey over targets 1-4. Diamond drilling is scheduled to resume in the third week of January and will continue to test prospects generated from a recently completed reverse circulation drilling program and boulder prospecting.

Prospecting during the fall turned up 41 mineralized boulders, of which 33 were found to be anomalous in gold. Five of the boulders yielded gold values between 5-10 grams, while one boulder assayed 42 grams.

Drilling will also continue to test Target 3 for extensions to the newly discovered gold zone.

Rainy River can earn 51% of the TPK project by spending $9.4 million in exploration over a three-year period and completing $1.5 million worth of private placement financings in Northern Superior. Rainy River just recently fulfilled part of its earn-in obligations by making a cash payment to Northern Superior of $1.3 million.

Print

Be the first to comment on "Rainy River cashes in with $75 million financing"

Leave a comment

Your email address will not be published.


*


By continuing to browse you agree to our use of cookies. To learn more, click more information

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.

Close