Canagold Resources Ltd. [CCM-TSX, CRCUF-OTCQB, CANA-FRA] on Friday announced brokered flow-through private placements that are expected to raise up to $5 million for exploration at the company’s New Polaris gold mine in northwestern British Columbia.
The company said Red Cloud Securities has agreed to act as sole agent and bookrunner in connection with a fully marketed, private placement of any combination of common shares to be issued as flow-through shares at 50 cents per share or flow through units sold to charitable buyers at 62 cents per unit.
Each charity flow-through share will consist of one flow-through share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to buy one Canagold common share for 75 cents at any time within a two-year period after closing.
The agent will have an option, exercisable in full or in part up to 48 hours prior to the closing of the offering to sell up to an additional $1 million in any combination of flow-through shares and charity flow-through units at their respective offering price.
Proceeds will be used to finance eligible exploration expenses at the New Polaris gold mine.
On Friday, Canagold shares eased 3.8% or $0.02 to 50 cents in light trading. The shares are currently trading in a 52-week range of 95 cents and 11 cents.
News of the financing comes after the company released high-grade results from drilling at New Polaris.
New Polaris 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.
The project 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).
The focus of the current drill program is infill and step-out drilling in the C West Main (CWM) vein system, which hosts a major part of the gold resource at New Polaris. The intercepts reported recently include results for two holes that also intercepted significant mineralization in a parallel vein (C 10) located in the hanging wall of the CWM vein.