American Tungsten closes US$40 million bought deal financing
American Tungsten Corp. [TUNG-CSE, TUNGF-OTCQB, RK90-FSE] said it has raised US$40 million from a bought deal private placement offering and will use the proceeds to advance exploration and development at the IMA Mine project in Idaho.
The company said the underwriters purchased, on a bought deal basis, 14.3 million units priced at $2.80 per unit. The amount raised includes the full exercise of the underwriters’ over-allotment option.
Under the terms of the financing, each unit consists of one Class A common share and one half of one Class A common share purchase warrant. Each warrant entitles the holder to purchase one additional Class A common share for $3.75 at any time before 5:00 p.m. on March 18, 2029.
The shares eased 2.1% or $0.06 to $2.78 in early trading, Wednesday, and trade in a 52-week range of $4.57 and 48.5 cents.
The IMA Mine is a past producing unground tungsten mine situated on 22 patented claims located in East Central Idaho. Between 1945 and 1957, the property produced approximately 199,449 MTUs of Wo3 and was subsequently explored for molybdenum and tungsten by various operators between 1960 and 2010. American Tungsten is currently conducting an exploration drill program and assessing the potential for re-start of underground mining operations at the IMA Mine.
American Tungsten recently announced the initiation of an augur drilling program in the historic lower tailings impoundment at the IMAsite The company said drilling activities will be conducted over 30 acres of historical tailings left from previous mine activities.
Preliminary samples form historical tailings collected in shallow trenches average 0.25% WO3 and 0.48 oz per tonne silver. Currently 35 drill holes are planned totaling approximately 370 feet to delineate tailings thickness and collect sample for assay and in-situ density. The duration of the drilling program is approximately three weeks.
“The tailings drilling program is a key component of our strategy to unlock value and fully define the opportunity at the historic IMA Mine,’’ said American Tungsten CEO Ali Haji. “Initial sampling continues to support our view that the tungsten grades withing the tailings are broadly representative of the remaining material on site,’’ he said. “With modern processing technologies far more efficient than those available in the 1950s, we believe there is a clear pathway to significantly improve historical recoveries.’’
Haji went on to say that the tailing represent a compelling low-cost early-production opportunity that can generate near-term cash flow while advancing meaningful site restoration as part of the company’s overall development plan.
The company holds an option to acquire full ownership, subject to a 2.0% royalty and has expanded its land position with 113 additional federal claims covering nearly 2,000 acres.