Blue Star aims to raise up to $3.5 million from private placement
Blue Star Gold Corp. [BAU-TSXV, BAUFF-OTCQB, 5WP0-FSE] said it plans to complete a non-brokered private placement of up to $3.5 million via the issuance of 35 million common shares priced at 10 cents each. The company said it intends to use the net proceeds for working capital purposes.
The shares eased 23% or $0.03 to 10 cents Wednesday and trade in a 52-week range of 20 cents and $0.045.
Blue Star is a mineral exploration and development company with a focus on Nunavut, Canada. The company’s landholdings cover 290 square kilometres of prospective and underexplored mineral properties in the High Lake greenstone belt.
The company’s properties are located 525 kilometres northeast of Yellowknife, N.W.T. in the Kitikmeot region of western Nunavut.
The company owns the Ulu gold project, consisting of the Ulu mining lease and Hood River property, and the Roma project. A significant high-grade gold resource exists at the Flood zone deposit (Ulu mining lease), and numerous high-potential exploration target areas occur throughout the company’s extensive land holdings, providing Blue Star with excellent resource growth potential. The site of the future deepwater port at Grays Bay is 40 to 100 kilometres to the north of the properties, and the proposed route corridor for the all-weather Gray’s Bay Road passes close by the Roma and Ulu gold projects.
The Ulu property consists of a renewable 21-year mining lease and covers an area of 947 hectares. The lease hosts an advanced gold project (Flood Zone) that between 1989 and 2012 saw significant exploration and development by BHP Group Limited [BHP-NYSE, BHPLF-OTCPK] and Echo Bay Mines, among others.
The past work includes approximately 1.7 kilometres of underground development and approximately 405 diamond drill holes that produced 88,330 metres of core on the Flood Zone, which contains the bulk of the Ulu gold resource and is open on strike and depth. Overall resources of 2.53 million tonnes of grade 7.02 g/t gold or 572,000 gold ounces (measured and indicated category) and 1.28 million tonnes of grade 7.34 g/t gold or 303,000 gold ounces (inferred category) have been estimated for the Ulu gold project.
Metallurgical testing on the Flood Zone gold mineralization has shown that gold is recoverable in amounts greater than 90% by flotation, gravity and cyanidation.
The Roma project covers 11,532 hectares of crown mineral claims and a mineral exploration agreement that totals 4,119 hectares in the northern section of the High Lake Greenstone Belt. These properties cover high grade gold showings discovered by previous operators, notably BHP from 1988 to 1994. In 1991, BHP drilled 10 shallow holes (465 metres to test 1.72 kilometres of strike on the vein. All drill holes intersected quartz veins from 15 metres to 37 metres vertically blow surface. Visible gold was noted in three of the drill holes and the best results were 12.38 g/t gold over 2.31 metres, including 64 g/t gold over 0.37 metres).