Loncor Gold Inc. [LN-TSX, LONCF-OTCQX, L051-FSE] said Friday it is raising $2.5 million from a non-brokered private placement financing, with proceeds earmarked for gold projects in the Democratic Republic of Congo (DRC).
It said the private placement will consist of up to 5.0 million units priced at 50 cents per unit, each of which will consist of one common share and one-half of one common share purchase warrant. Each warrant entitles the holder to acquire one common share at an exercise price of 75 cents for two months after closing.
Loncor shares advanced on the news, rising 5.5% or $0.025 to 47.5 cents in light trading volume. The shares currently trade in a 52-week range of 86 cents and 39.5 cents.
Loncor is a Canadian gold exploration company with a focus on the Ngayu Greenstone Gold Belt in the northeast of DRC. Its portfolio includes the 84.60%-owned Imbo and wholly-owned Makapela Projects.
At the Imbo Project, the Adumbi deposit holds an indicated resource of 1.88 million ounces of gold (28.18 million tonnes grading 2.08 g/t gold). Adumbi and two neighbouring deposits hold an inferred resource of over 2.0 million ounces (22.5 million tonnes grading 2.89 g/t), with 84.68% of these resources being attributable to Loncor.
In December, 2021 Loncor announced the results of a preliminary economic assessment (PEA). It indicates that the Adumbi deposit can produced 303,000 ounces of gold annually over a 10.3-year mine life within a proposed pit shell.
The PEA envisages total cash costs of US$852 per ounce over the life of the mine and all-in-sustaining costs of US$950 per ounce in the HEP Hybrid case. Project economics and financial analysis was undertaken on two power options, including a hydroelectric power (HEP) case and diesel only case.
Preproduction capital costs in the HEP case are estimated at US$530 million. Whereas in diesel only scenario, the preproduction capital cost is much lower at US$392 million. However, the all-in-sustaining cost in a diesel scenario would be higher at US$1,040 an ounce.
The company said additional deposits and prospects occur close to Adumbi and have the potential to add mineral resources and feed for the mining operation. Further along trend from Adumbi, for example, the Manzako and Kitenge deposits host an inferred mineral resource of 313,000 ounces of gold.
The company said it is already in discussion with potential power suppliers with experience in the DRC to fund and build a hydroelectric facility at Adumbi and then have an offtake agreement with Loncor to supply power for the operation.
The Makapela Project (which is 100%-owned by Loncor and is located approximately 50 kilometres from the Imbo Project) has an indicated mineral resource of 614,200 ounces of gold (2.20 million tonnes grading 8.66 g/t gold) and an inferred resource of 549,600 ounces (3.22 million tonnes of grade 5.20 g/t).