GoGold raising $25 million for Mexico gold project
GoGold Resources Inc. [GGD-TSX; GLGDF-OTCQX] is increasing the size of a previously announced bought deal financing to $25 million, money that will be used to fund exploration at the company’s Los Ricos Project in Jalisco State, Mexico.
In a February 4, 2020 press release GoGold said an underwriting syndicate led by Sprott Capital Partners LP and PI Financial Corp. had agreed to purchase 21.4 million units of the company on a bought deal basis for 70 cents per unit, raising gross proceeds of $15 million.
However, the company has subsequently said the underwriters have agreed to amend the terms of the offering and have agreed to purchase 35.7 million units at the same price, bumping the gross proceeds to $25 million.
Under the terms of the offering, each unit consists of one common share and one-half of a common share purchase warrant. Each warrant entitles the holder to acquire an additional common share at 85 cents for two years after the date of closing. However, if the volume weighted average price of the common shares is equal to or greater than $1.20 for 10 consecutive trading days, the company can exercise an option to accelerate the expiry date.
On Wednesday February 5, GoGold shares fell 2.1% or $0.015 to 70 cents on volume of 765,826. The shares are currently trading in a 52-week range of 25 cents and 86 cents.
GoGold is a Canadian-based silver and gold producer with operations in Mexico.
Back in March, 2019, the junior acquired the rights to an agreement that provides it with the option to acquire a 100% interest in Los Ricos, which consists of 29 concessions and covers over 22,000 hectares. The property is home to several historical mining operations and is located roughly 100 km northwest of Guadalajara.
GoGold has said 65 historical drill holes were completed between 2003 and 2004. The majority intercepted mineralization from near surface. The numerous historical workings date as far back a Spanish colonial times, but mainly date back to the early 20th century when Marcus Daly Jr., the son of the founder of Anaconda Copper Co., and James Watson Gerhard developed it into a modern mine, producing up to 500 tonnes of ore per day. The mine closed in 1930, about a year after the stock market crash.
On August 22, 2019, GoGold entered into various agreements worth $7.1 million to accelerate the acquisition of the 29 concessions, replacing a previous option deal that was terminated. Under the concession agreements, 5 of the 29 concessions were to be transferred to GoGold, the remaining concessions were to be transferred at a rate of 5 concessions every five months.
In November, 2019, GoGold shares rallied after the company tabled results from drilling on the first five acquired concessions
Highlights from 10 new drill holes include drill hole LRGG-19-056, which returned 26 metres of 2.97 g/t gold equivalent, including 4.0 metres of 14.16 g/t gold equivalent from 296.0 to 325.0 metres.
This is the second deepest hole to be drilled at Los Ricos to date, the company said.
In mid-October, 2019, GoGold said it completed a Phase I diamond drilling program consisting of 10,000 metres of HQ size diamond drill core. It also said Phase II has started and a third drill was added to the program.
The core drilling program is focused on defining the mineralized halo around the historical high-grade ore shoots as defined by the underground workings and the 65 historical reverse circulation drill holes on the property.
The program has now been expanded for additional testing along the 3.2 kilometres of the Los Ricos mineralized zone.