Golden Predator Mining Corp. [GPY-TSXV; NTGSF-OTC] said Friday July 5 that it is raising $6 million from a private placement financing, and revealed that the bulk of the shares sold in the offering will be taken up by Bay Street billionaire gold bug Eric Sprott.
Golden Predator said it is planning to proceed with a proposed private placement of up to 8 million charity flow-through shares at 45 cents per share. The company is also offering up to 4 million traditional flow-through shares at 38 cents per share as well as up to 3 million non-flow-through shares at 32 cents each.
The combined proceeds of the offering are expected to total up to $6.08 million. Eric Sprott has agreed to acquire 5 million shares sold through the offering, increasing his ownership stake to 13 million shares. No warrants are being issued in the financing.
Golden Predator said proceeds of the private placement will be applied to the company’s Brewery Creek and 3 Acres projects in the Yukon and to general working capital.
On Friday, Golden Predator shares rose 5.2% or $0.02 to 0.405 cents. The shares trade in a 52-week range of 17.5 cents and 45 cents.
Golden Predator recently said it has received the approval from the Yukon government to proceed with the restart of its Brewery Creek gold mine without having to re-enter the permitting process. Brewery Creek is a former open pit, heap leach mine located 45 km from Dawson City.
From 1996 to 2002, approximately 280,000 ounces of gold was produced from seven near-surface oxide deposits along the property’s reserve trend. The mine was put into temporary closure in 2002 following a collapse in the price of gold below US$300 an ounce.
With established resources grading more than 1.0 g/t gold and low a Capex to production in a safe first world jurisdiction, Brewery Creek has a clear path to production as an economically and environmentally proven project, Golden Predator said in a press release on Friday.
Brewery Creek is one of two key assets in the Golden Predator portfolio. The other is the 3 Aces gold project. The 3 Aces property hosts a high-grade orogenic gold project and is located northeast of Watson Lake.
The company made an early decision to bulk sample at its 3 Aces Project when it realized that much of the gold contained in its veins was high-grade and nuggety. The ‘nugget effect’ occurs when the gold is not distributed evenly throughout the deposit but rather is accumulated in clumps within the veins with visible gold often sitting loosely in open spaces and along fractures.
To eliminate the cost of shipping bulk sample materials outside of Yukon, and to effectively manage the processing costs, Golden Predator built its own closed system processing plant.
Golden Predator said the processing plant has demonstrated gold recoveries of over 85% using a chemical-free process.
This green gold provides the gold for the mintage of .999 gold coins from the Yukon Mint, a wholly-owned Golden Predator subsidiary.