To finance its share of a $12-million underground exploration program at the Holloway gold project near Matheson, Ont., Teddy Bear Valley Mines (CDN) has raised $1.23 million through a private placement of 818,692 shares at $1.50 per share.
Hemlo Gold Mines (TSE) subscribed to 415,375 shares and Canadex Resources (TSE), which owns a fleet of school buses and a number of producing oil and gas wells in the U.S., subscribed to 403,317 shares.
The placement of flow-through shares increases Hemlo’s interest in Teddy Bear to 10% and Canadex’s interest to 19.7%.
Teddy Bear Chairman Jack Riddell is chairman and president of Canadex. Hemlo has also agreed to purchase one million shares of Freewest Resources (TSE) under a 1989 financing agreement between the affiliates. The senior gold producer will acquire the common shares on a flow-through basis at $2.11 per share, increasing its interest in Freewest to 2.33 million common shares or 21.5%.
Hemlo with 50.79%, Freewest with 33.86% and Teddy Bear with 15.35% share ownership of the Holloway project, where reserves stand at 5.5 million tons grading 0.25 oz. gold per ton. Hemlo, as operator, is currently supervising a 14-month underground reserve validation program on the property’s Lightning gold zone.
Meanwhile, an application for a plan of arrangement to reverse a 1984 restructuring of Teddy Bear is still before the Ontario courts. President Andy Chater expects to appear before the court in early September.
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