Gowest raising $6 million for Timmins exploration
Gowest Gold Ltd. [GWA-TSXV] said Tuesday December 10 that it intends to raise up to $6 million from a non-brokered private placement with proceeds earmarked for the company’s 100%-owned Bradshaw deposit and for working capital purposes. The Bradshaw deposit is located on Gowest’s Frankfield property, which is part of the company’s North Timmins gold project in northern Ontario.
The non-brokered private placement consists of 20 million units at 20 cent each, expected to generate gross proceeds of $4 million, and up to just over 9.0 million flow-through units at 22 cents each, generating gross proceeds of up to $2 million.
Each unit consists of one common share and one half of a common share purchase warrant. Each whole warrant entitles the holder to acquire one common share of the company at 30 cents for a period of 24 months after closing.
Each flow-through unit will consist of one common share and one half of a warrant. Each warrant entitles the holder to acquire one common share at 30 cents for a period of 24 months after closing. The common shares underlying the warrant will not be issued as flow-through shares.
Gowest shares recently traded at 19 cents in a 52-week range of $0.08 and 50 cents.
The private placement may close in one or more tranches. However, it is anticipated that closing will occur by December 23, 2019.
Gowest is exploring additional gold targets on its 100-km2 North Timmins Gold Project. It includes the Bradshaw deposit, which is estimated to contain an NI 43-101-compliant indicated resource of 2.1 million tonnes, grading 6.19 g/t gold or 422,000 ounces. On top of that is an inferred resource of 3.6 million tonnes, grading 6.47 g/t gold, or 755,000 ounces.
A June, 2015 feasibility study estimated that Bradshaw also hosts reserves in the probable category of 277,000 ounces.
In October, 2018, QMX Gold Corp. [QMX-TSXV] entered into a custom milling agreement with Gowest. Under the agreement, QMX said the Aubel mill would be the focus of an initial pilot program involving the processing of up to 120,000 tonnes of ore from Gowest’s Bradshaw deposit for a period of one year. QMX said Gowest pledged to fund the restart of the crushing, grinding and flotation circuits, which were winterized in mid-2016 following the termination of mining activities at the Lac Herbin Mine.
The Aurbel gold mill and tailings facility is located 15 km east of Val d’Or, Quebec.
However, Gowest recently said it had terminated the agreement with QMX after striking a deal to process up to 30,000 tonnes of Bradshaw deposit ore at Northern Sun Mining Corp.‘s [NSC-TSXV] Redstone Mill in Timmins. Under the agreement with Northern Sun, Gowest is responsible for certain care and maintenance costs at Redstone and has agreed to provide a standby fee of $200,000. The deal with Northern Sun expires on September 30, 2020.