Freegold raises $41.9 million for Alaska drilling
Freegold Ventures Ltd. [FVL-TSX] has closed an upsized brokered private placement offering that raised $41.9 million, an amount that includes the exercise in full of the agent’s option for additional gross proceeds of $5.47 million.
Under an agency agreement, 49.4 million units of the company were issued at a price of 85 cents per unit. Each unit consists of one common share and one half of one common share purchase warrant. Each warrant can be used to acquire one common share of the company for 24 months from closing an an exercise price of $1.30 per warrant share. However, the warrants are callable should the daily volume-weighted average trading price of the common shares exceed $1.30 for a period of 20 consecutive trading days starting on a date that is six months from the closing date of the offering.
Canadian financier Eric Sprott, through an entity owned and controlled by him, purchased 14.8 million units in the offering, representing 30% of the units issued.
Freegold offers investors a window on copper and gold exploration in Alaska, a stable jurisdiction with a long mining history and significant mineral endowment that remains relatively underexplored.
Freegold’s asset portfolio includes the Golden Summit project which contains a bulk tonnage resource which has already been defined, and the Shorty Creek copper-gold porphyry discovery. Both are located in central Alaska not far from Fairbanks, a city with a population of roughly 100,000.
The flagship Golden Summit project consists of 50 patented claims and 94 unpatented federal claims (5,921 hectares) and is located on the north portion of the Fairbanks Mining District, a northeast-trending belt of lode and placer gold deposits that compose one of the largest gold-producing areas in the state of Alaska. The Fairbanks Mining District has produced over 9.5 million ounces of placer gold, of which 6.75 million ounces have been recovered from streams that drain the project.
In addition, over 506,000 ounces of lode gold were recovered from past producing mines on the project.
Golden Summit is currently estimated to contain an indicated resource of 1.36 million ounces (6.14 million tonnes at grade 0.69 g/t gold) and an inferred resource of 1.6 million ounces (71.5 million tonnes of 0.69 g/t gold).
Mineralization is hosted within the Dolphin intrusive and surrounding metasediments, which host four former underground gold mines known as Clearly Hill (281,000 ounces), American Eagle (60,000 ounces), Hi-Yu (110,000 ounces), and Newsboy Mine).
Freegold said it plans to use net proceeds from the offering for general working capital and corporate purposes, with a primary focus on advancing the Golden Summit project. Drilling at Golden Summit is expected to resume next month, and an updated mineral resource estimate is anticipated later in the second quarter, once the assays from the 2024 drill program have been finalized.
Freegold Ventures shares on Friday erased 2.50% or $0.02 to 78 cents. The shares trade in a 52-week range of $1.32 and 39 cents.