Falco raising up to $5.0 million for Horne 5 project

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Falco Resources Ltd. [FPC-TSXV] has announced details of a brokered private placement financing that is expected to raise up to $5.0 million.

It will consist of units priced at 23 cents each, and up to 3.57 million flow-through shares valued at $1.0 million.

Each unit will consist of one common share and one half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one common share for 35 cents for two years after closing, which is expected to occur on June 27, 2024. The company is granting the underwriters an option to sell up to an additional $1.0 million worth of offered securities, including up to $250,000 worth of additional flow-through shares. The option remains open until the second day before the closing date. If it is fully exercised, total proceeds of the offering could increase to $6.0 million.

The company said proceeds from the sale of the units will be used to advance its Horne 5 project in in Rouyn-Noranda, Quebec. Proceeds from the flow-through shares will be used to fund exploration at the company’s other properties, including 67,000 hectares in the Noranda Mining Camp.

Falco were active on the news, falling 9.25% or $0.025 to 24.5 cents on volume of 209,670. The shares currently trade in a 52-week range of 49 cents and $0.08.

The Horne 5 deposit is located immediately below the former Horne mine, which was operated by the company previously known as Noranda from 1926 to 1976. Those operations produced approximately 2.5 billion pounds of copper and 11.6 million ounces of gold.

The Horne 5 Project is estimated to contains 6.0 million ounces of proven and probable gold equivalent reserves

Results of a feasibility study announced in October, 2017 envisages a 15-year mine life for Horne 5, producing an average of 219,000 ounces of gold annually at an all-in-sustaining cost of US$399 per ounce, net of by-product credits, including royalties over the life of the mine. Pre-production construction costs have been estimated at $801.7 million. The feasibility study forsees full mine production by the first half of 2022.

Back in January, 2024 Falco said it had entered into an operating license and indemnity agreement (OLIA) with Glencore Canada Corp. Under the OLIA, Glencore has granted to Falco a license to utilize a portion of its land for the development and operation of the Horne 5 project.

The OLIA takes into account its overlap and close proximity to Glencore’s copper smelting operations at the Horne smelter in Rouyn-Noranda.

The OLIA enables each company to collaborate and exchange information in connection with the development and operation of the Horne 5 Project. The OLIA also allows Falco to move forward with the next steps of the development of the Horne 5 Project, mainly the advancement of permitting with the government of Quebec and financing for the development of the project.’

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