Canagold investor Sun Valley raises stake to 23.5%

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Canagold Resources Ltd. [CCM-TSX, CRCUF-OTCQB, CANA-FRA] said Sun Valley Investments AG has increased its stake in the company via the acquisition of 4.7 million common shares via a charity flow-through private placement that raised $1.5 million. The charity flow-through shares are priced at 32 cents each.

As a result, Sun Valley will wind up owning 21.5 million shares of Canagold or 23.5% of the shares outstanding. That’s up from 19.4% prior to the latest acquisition. Sun Valley is a private equity firm with a focus on precious metals mining.

On Friday, Canagold shares were unchanged at 25 cents. The shares are currently trading in a 52-week range of 58 cents and 21.5 cents.

The announcement comes after Canagold recently said it has retained Ausenco Engineering Canada Inc. to complete a feasibility study on the company’s New Polaris project in northwestern B.C.

Key objectives of the feasibility study include a resource model update that will include over 30,000 metres of additional drilling, a mining reserve calculation and underground mine development plan. Another key objective is the completion of detailed capital and operating cost estimates, including a detailed financial model for the life of the project.

The New Polaris gold project in northwestern British Columbia is the flagship asset of Canagold, which recently changed its name from Canarc Resources. The project is located 100 kilometres south of Atlin and 60 kilometres northeast of Juneau Alaska. It consists of 61 contiguous Crown-granted mineral claims and one modified grid claim covering 850 hectares.

Back in March, 2022, Canagold said drilling has shown that the mineralized system at New Polaris extends to depths beyond 600 metres.

New Polaris was mined via underground methods from 1938 to 1942, and again from 1946 to early 1951, producing 250,000 ounces of gold from 740,000 tonnes of ore at an average grade of 10.3 g/t gold. Three main veins (AB, C and Y) were mined to a maximum depth of 150 metres and have been traced by drilling for up to 1,000 metres along strike and 800 metres down dip. They are still open for expansion.

The project is currently estimated to contain an indicated resource of 586,000 ounces of gold at 10.8 g/t and an inferred resource of 485,000 ounces at a grade of 10.2 g/t, material that could support production of 80,000 ounces of gold annually for 8.7 years, according to a March, 2019, preliminary economic assessment (PEA).

On July 12, 2022, the company released a summary of results of a 30,000 metre-infill drill program. It said infill drill holes delivered gold grades and mineralized widths that support and potentially improve on the current resource estimate at downhole depths as predicted by the geological model.


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