McFarlane Lake taking 19.9% stake in iMetal Resources
McFarlane Lake Mining Ltd. [MLM-CSE, MLMLF-OTC, W2Z-FRA] has announced details of a propose strategic investment in iMetal Resources Inc. [IMR-TSXV]. The move is expected to align the interests of both companies in the Gowganda region of northern Ontario, where iMetal’s Gowganda West property borders McFarlane’s Juby gold project.
Under an agreement, McFarlane Lake has pledged to purchase 14.2 million units of iMetal, priced at 10 cents per unit for an aggregate subscription price of $1.42 million, a move that would leave McFarlane Lake with beneficial ownership of 19.9% of iMetal’s outstanding shares.
The strategic investment is being completed pursuant to iMetal’s previously announced, and now fully subscribed, non-brokered private placement consisting of up to 30 million units priced at 10 cents per unit, generating gross proceeds of $3.0 million.
Each unit consists of one iMetal share and one common share purchase warrant, each of which will entitle the holder to buy one iMetal share at an exercise price of 17.5 cents for three years from the date of closing. However, the expiry date can be accelerated if the volume weighted average trading price of iMetal shares on the TSX Venture Exchange exceeds 40 cents for 20 consecutive trading days (subject to a beneficial ownership blocker).
Under an agreement, McFarlane Lake will have the right to nominate one director to iMetal’s board of directors, participate in future equity issuances, and provide certain technical oversight on exploration on its Gowganda property.
On Thursday, iMetal shares rose 6.90% or $0.01 to 15.5 cents. The shares trade in a 52-week range of 33 cents and $0.08. McFarlane Lake shares were unchanged at 43 cents. The shares trade in a 52-week range of 44 cents and $0.085.
McFarlane Lake is a Canadian gold exploration company with a focus on advancing its flagship Juby Gold Project, located near Gowganda, Ontario, within the established Abitibi Greenstone Belt. The project hosts a NI 43-101-compliant estimated mineral resource of 1.01 million ounces of gold in the indicated category at an average grade of 0.98 g/t gold (31.74 million tonnes) and an additional 3.17 million ounces of gold in the inferred category, at an average grade of 0.89 g/t gold (109.48 million tonnes). The estimate was calculated using a long-term gold price of US$2,500 an ounce, applying a cut-off grade of 0.25 g/t gold for open pit and 1.85 g/t gold for underground resources.
A sensitivity analysis completed at a higher gold price of US$3,750 per ounce, resulted in an inferred resource of 1.20 million ounces grading 0.94 g/t gold (39.51 million tonnes) and an inferred resource of 4.23 million ounces grading 0.85 g/t gold (154.40 million tonnes) applying cut-off off grades of 0.25 g/t for open pit and 1.15 g/t for underground resources.
IMetal’s flagship Gowganda West property is an exploration-stage gold project with a recent discovery hole of 48.5 metres at 0.85 g/t gold that borders the Juby Deposit and is located within the Shining Tree Camp area.
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