NxGold could raise $4 million for Pilbara exploration

NxGold Ltd. [NXN-TSXV; LBHRF-OTC] rallied Friday June 1 after the company said that due to demand from investors, the company is upsizing a previously announced non-brokered private placement of units to $3 million from $1 million.

The company said it may increase the size of the offering to $4 million.

Net proceeds from the increased offering will be used for exploration at the company’s Mt. Roe Project in the Pilbara region of Western Australia and for general working capital purposes.

NxGold shares jumped 5.9% or $0.01 to 18 cents on volume of 479,871. The stock is trading in a 52-week range of 14 cents and 40 cents.

Based in Vancouver, NxGold owns 80% of the Mt. Roe gold project. The company recently said it has commenced exploration efforts there, including mapping and data collection.

It said the program of field mapping and data collection is designed to generate a geological map suitable for planning trenching and future drilling.

“The objective of the program is to enhance our understanding of the distribution and thickness of conglomerates containing gold, the location and unconformity, the geometry (dip), and the potential thickness of cover sequence.

Artemis Resources Ltd. [ARTTF-OTC; ARV-ASX; ATY-FSE] recently said the Pilbara is blessed with both iron ore and oil and gas resources. “We believe that the Pilbara has a third mega-resource: gold,” it said.

NxGold has also entered into an earn-in agreement with Meliadine Gold Ltd. to earn up to a 70% interest in the Kuulu Project (formerly known as the Peter Lake Gold Project] in Nunavut.

Under an October, 2016, agreement, a predecessor of NxGold gained the option to acquire the first 50% interest by spending $10 million on the property. It agreed to spend another $25 million to increase its interest to 70%.

The Kuulu Project is located approximately 40 km northwest of Rankin Inlet, and covers 4,174 hectares immediately along trend from Agnico-Eagle Mines Ltd.’s [AEM-TSX, NYSE] Meliadine gold mine, which is scheduled for startup in the third quarter of 2019.

Under the terms of the private placement, each unit is being offered at 18 cents and will be comprised of one share and one share purchase warrant. Each warrant entitles the holder to acquire one share of the company at 27 cents for 36 months after the closing of the increased offering.

Closing is expected by June 13, 2018, the company said.