NuLegacy raising up to $7.5 million for Nevada drilling

NuLegacy Gold Corp. [NUG-TSXV; NULGF-OTCQX] is moving to raise up to $7.5 million from a private placement offering of units priced at 7.5 cents per unit. Proceeds will be used to fund exploration at the company’s 100%-owned Red Hill property in Nevada.

NuLegacy said Cormark Securities Inc. has agreed to act as lead agent in connection with a fully marketed private placement offering of units. The aim, it said, is to raise between $4 million and $7 million.

Each unit will consist of one common share and one half of one common share purchase warrant. Each warrant will enable the holder to acquire one NuLegacy common share at an exercise price of 12 cents for a period of 36 months after the scheduled closing date on October 8, 2019.

Prior to that, key shareholders, including Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] and OceanaGold [OCG-TSX; OCGT-ASX], can elect to participate in the offering in order to maintain their equity ownership interests of 11% and 16.2% respectively.

In addition, it is anticipated that directors and officers of NuLegacy will participate in the offering for up to 10 million units, the company said in a September 17, 2019 press release that came after the close of trading on North American stock markets.

NuLegacy shares advanced on the news, rising 7.7% or $0.005 to $0.07. The shares are currently trading in a 52-week range of $0.03 and 19.5 cents.

The Red Hill property is located immediately adjacent to Barrick’s huge Goldrush gold discovery, which is located on the Cortez gold trend, an alignment of deposits that ranks among the world’s most productive gold mining belts.

The 98 km² Red Hill Project includes a number of exploration prospects which are clustering around a conceptual threshold resource target (referred to as the Iceberg deposit) of 90 to 110 million tonnes, grading between 0.7 g/t and 1.1 g/t gold.

In September, 2016 NuLegacy said assay results had confirmed that that a target previously known as the Avocado anomaly hosts a Carlin-type deposit. (Carlin-style deposits feature micron sized-gold particles that are not visible to the naked eye).

A 2017 summer drilling program added two new gold zone discoveries – the Serena and VIO zones (described by the company as the only new gold discovery in Nevada during 2017) – to the inventory of gold-bearing zones on the Red Hill property, while expanding or adding to the previous discoveries in the North and Central Iceberg deposits.

Heading into 2018, NuLegacy previously said its main aim was to produce a NI 43-101-compliant resource estimate for the Iceberg deposit. This year, the company’s exploration plans were expected to include 40,000 feet of reverse circulation and core drilling in 40 holes. The budget for that program is $5 million, it said.

In an August 27, 2018 press release, the company said recent results have convinced NuLegacy’s exploration team to focus on the opportunity to expand the Serena Zone. At that time, the company said it was planning to drill at least four follow-up holes within a 10-12-hole program that was set to start in mid-September, 2018.

“The results of the aggressive step-out drilling during 2018-19 significantly improved our Red Hill property’s prospectivity to a Tier 1 exploration asset,” said NuLegacy CEO Albert Matter in the September 17, 2019 press release.

“This financing will allow us to further execute on our drilling program and build upon those results and I look forward to sharing those results over the next six to nine months,” he said.

Matter stepped back into the CEO role in April, 2019, following some changes at the executive level, including the departure of former CEO James Anderson, who is now President and CEO of Vangold Mining Corp. [VAN-TSXV](halted).