Gentile taking 19.7% stake in McFarlane Lake Mining, shares rally

McFarlane Lake Mining Ltd. [MLM-CSE, MLMLF-OTC, W2Z-FRA] shares rallied strongly Thursday after the company announced details of a $6.75 million non-brokered private placement financing led by strategic investors Michael Gentile, and Pierre Beaudoin.

The shares jumped 17.24 or $0.025 to 17 cents, and trade in a 52-week range of 17.5 cents and 0.025.

Gentile, already a well-known mining investor, has agreed to subscribe for up to $6.35 million of the financing, while Beaudoin has pledged to subscribe for the balance. Beaudoin is a precious metal mining executive with over 30 years of diversified mining, mineral processing, design, construction and start-up experience.

Under the terms of the offering, the investors are subscribing for units priced at 12 cents per unit. Each unit will consist of one common share and one common share purchase warrant. Each warrant will entitle the holder to acquire one additional common share for 16 cents for 36 months from the date of issuance.

Upon closing, Gentile is expected to hold approximately 19.67% of the company’s issued and outstanding shares on a partially diluted based (assuming the exercise of warrants).

McFarlane Lake is a Canadian gold exploration company with a focus on advancing its flagship Juby Gold Project, located near Gowganda, Ontario, within the established Abitibi Greenstone Belt. The project hosts a NI 43-101-compliant estimated mineral resource of 1.01 million ounces of gold in the indicated category at an average grade of 0.98 g/t gold (31.74 million tonnes) and an additional 3.17 million ounces of gold in the inferred category, at an average grade of 0.89 g/t gold (109.48 million tonnes). The estimate was calculated using a long-term gold price of US$2,500 an ounce, applying a cut-off grade of 0.25 g/t gold for open pit and 1.85 g/t gold for underground resources.

A sensitivity analysis completed at a higher gold price of US$3,750 per ounce, resulted in an inferred resource of 1.20 million ounces grading 0.94 g/t gold (39.51 million tonnes) and an inferred resource of 4.23 million ounces grading 0.85 g/t gold (154.40 million tonnes) applying cut-off off grades of 0.25 g/t for open pit and 1.15 g/t for underground resources.

Proceeds of the offering may be used to repay a portion of the company’s outstanding debentures, to advance the company’s exploration and development at Juby Lake, and for general working capital.

“I am excited to make this major investment in McFarlane Lake and support the advancement of the Juby Lake Project,’’ said Gentile. “McFarlane Lake ticks all the boxes I look for in a mining project: size, scale, infrastructure, grade and a compelling exploration upside all in a proven Tier 1 jurisdiction and trading at only a $60 million market cap.” “I look forward to working close with management to advance this asset and create long-term shareholder value.”