International Tower Hill raising US$105 million for Alaska gold project

International Tower Hill Mines Ltd. [ITH-TSX, THM-NYSE-American] has announced the pricing and upsizing of a US$65 million public offering of common shares and US$40 million concurrent private placement.

The previously announced public offering in the United States consists of 29.3 million common shares at a price of US$2.22 per share.

In connection with the offering, Paulson & Co. Inc. has agreed to purchase US$40 million worth of common shares in a private placement at the public offering price. The gross proceeds to the company from the offering and the concurrent private placement, before deducting commissions and expenses and other expenses, will be approximately US$105 million.

The company intends to use the net proceeds to fund exploration and development of the Livengood project north of Fairbanks, Alaska., including drilling, metallurgical studies, feasibility studies, technical studies, baseline environmental studies, detailed engineering in support of permitting, permitting, legal support, community engagement, mineral leases and land payments, acquisitions and general corporate purposes.

The company has granted the underwriters an option to purchase an additional 4.39 million common shares representing up to 15% of the number of shares to be sold in the offering. The underwriters will have 30 days from the date of the underwriting agreement to exercise the option, a move that would result in total gross proceeds to the company of approximately US$115 million.

International Tower Hill controls 100% of the Livengood Gold Project. The company said it ranks as the largest North American gold-only deposit that is not wholly-owned by a producer. The project hosts a measured and indicated resource of 704.5 million tonnes of grade 0.60 g/t gold or 13.6 million contained ounces. On top of that is an inferred resource of 16 million tonnes of grade 0.40 g/t gold or 207,000 ounces.

A portion of those mineral resources have been converted to proven reserves of 430.1 million tonnes of grade 0.65 g/t or just over 9.0 million ounces.

Livengood is a large but low-grade deposit and in order to be viable requires the recovery of gold at a low per-tonne unit cost. The company has said the highway near the project is a major positive factor that will reduce initial development costs and project timing. The project has been the site of near continuous placer mining for the last 90 years. Livengood is envisioned to be a high-volume mining operation similar to the Fort Knox mine, located 75 kilometres to the southeast.

The operation is expected to generate approximately 1,000 direct jobs during the construction phase and over 350 direct operational jobs for the life of the mine, currently assumed to last approximately 23 years.

Based on a pre-feasibility study dated April, 2017, the project breaks even at a gold price of US$1,231 an ounce.

On Friday, the shares 8.6% or 29 cents to $3.09 and trade in a 52-week range of $4.37 and 65 cents.