The company said it intends to use net proceeds from the offering, together with the company’s current working capital, and revenue to be generated from the sale of gold from the Bachelor Lake clean-up process in Quebec, to complete a 13,000-metre drill program before the end of 2023.
Proceeds will also be used to fund its closure bond commitment for the Bachelor Lake mill and Barry deposit, and finance operations for the next 12 months.
The private placement is expected to consist of between 17.6 million and 29.4 million units priced at 17 cents. Each unit will consist of one common share and one-half of one common share purchase warrant. Each warrant will entitle the holder to acquire one share at an exercise price of 24 cents for two years from the date of issuance.
The offering may be completed in one or two closings, with the first closing scheduled for September 21, 2023.
Details of the financing were announced after the close of trading on September 11, 2023, when Bonterra shares closed at 19.5 cents. The shares currently trade in a 52-week range of 69 cents and 19.5 cents.
Bonterra is a gold exploration and development company with a focus on the Urban Barry mining camp in Quebec, where the company has rights to more than 38,000 hectares.
The company has four main assets, Gladiator, Moroy, Barry and Bachelor that collectively have a total of 1.24 million ounces of gold in the measured and indicated categories and 1.78 million ounces in the inferred category.
Bonterra owns the only permitted and operational gold mill in the region. In a news release on August 9, 2023, Bonterra said the Bachelor Mill cleanup process has recovered 630 ounces of gold to date, generating revenue of $1.6 million. Gold recovery effort continue at the mill and the company expects additional revenue in the coming months.
The next gold shipment is expected in the fourth quarter of 2023, and when combined with the 630 ounces already sold, revenue from the mill cleanup is expected to offset the majority of the company’s exploration activities through the end of 2023.
Meanwhile. Bonterra said is has been working on an updated exploration program with the objective of testing the extension of mineral resources near the Barry, Gladiator and Bachelor deposits.
Bonterra recently commented on the forest fires which halted its operations in June, 2023. Fortunately he Barry and Gladiator camps and Bachelor Mill complex were not damaged by the fires.