Gowest Gold arranges $25 million offering for Ontario mine
Gowest Gold Ltd. [GWA-TSXV] said Thursday it has arranged a $25 million offering with investors and will use the proceeds for continued development of the Bradshaw Deposit. Bradshaw is located on Gowest’s Frankfield property, which is part of the company’s North Timmins gold project in northern Ontario.
Development will include the planned restart of mining operations at Bradshaw, as well as for exploration at other areas of the North Timmins gold project.
GoWest said Greenwater Investment Hon Kong Ltd. and other investors have agreed to purchase an aggregate of 150 million units of the company at an issue price of 10 cents per unit for an aggregate purchase price of $15 million.
Lush Land Investment Canada Inc. has agreed to purchase promissory notes of the company in an aggregate principal amount of $10 million. The promissory notes will be convertible into units at a conversion price of 10 cents per unit.
Each unit issued in the offering or on conversion of the promissory notes will consist of one common share and three quarters of one common share purchase warrant. Each whole warrant can be used to purchase one additional common share for a period of 24 months following the closing date of the unit offering or conversion date of the promissory notes at a purchase price of:
- 10 cents per share until the date that is three months following the unit issue date.
- Thereafter at 12 pe share until that date that is 12 months following the issue date.
- Thereafter at 15 cents per share until the date that is 24 months after the issue date.
“With these funds in hand, we will finally be ready to restart mining activities at Bradshaw and continue to move towards production,’’ said Gowest President and CEO Dan Gagnon. “Clearly, this represents a new beginning for Gowest, as we prepare to become a mining company and continue the work of expanding our geological resources and reserves through additional exploration,” he said.
Greenwater, Gowest’s largest shareholder, has agreed to purchase 65 million units for $6.5 million. The other participants in the offering are principally existing shareholders of the company.
Greenwater is an investment company with a head office located in Wan Chai, Hong Kong. It currently holds a 44.8% stake in Gowest.
Lush Land is an investment company with a head office located in Oakville, Ont. It currently holes a 9.1% stake in Gowest.
The Bradshaw Deposit, which is estimated to contain an NI 43-101-compliant indicated resource of 2.1 million tonnes, grading 6.19 g/t gold or 422,000 ounces. On top of that is an inferred resource of 3.6 million tonnes, grading 6.47 g/t gold, or 755,000 ounces.
A June, 2015 feasibility study estimated that Bradshaw also hosts reserves in the probable category of 277,000 ounces.
Gowest shares were priced at 12.5 cents in early trading Thursday. The shares are currently trading in a 52-week range of 19.5 cents and $0.05.