O3 Mining completes $21 million bought deal financing
O3 Mining Inc. [O111-TSXV] said it has raised almost $21 million from an upsized bought deal public offering. The original target was $15 million. The company said net proceeds will be used to advance the company’s assets in Quebec as well as for working capital and general corporate purposes.
The offering consists of 18.9 million units priced at $1.10 per unit. Each unit consists of one common share and one half of one common share purchase warrant. Each warrant entitles the holder to acquire one common share for two years after the closing date at an exercise price of $1.45.
Certain directors and officers of O3 Mining purchased 1.93 million units.
O3 Mining shares advanced on the news, rising 0.971% or $0.01 to $1.04. The shares trade in a 52-week range of $1.72 and $1.02.
O3 Mining’s key asset is the Marban Alliance property (previously known as Marban Engineering), which is located in western Quebec in the Val d’Or region.
Marban is situated on the Malartic property, which is located about 12 kilometres from the Canadian Malarctic Mine and along the same structure as Wesdome Gold Mines Ltd.’s [WDO-TSX] Kiena deposit.
The property consists of three mining claims and three concessions, containing the historic Kierens, Norlartic and Marban gold mines.
After releasing a technical report containing a preliminary economic assessment (PEA) for the Marban mine project, the company previously said it intended to complete a pre-feasibility study to advance the Marban project towards production as part of a staged development strategy while continuing its aggressive drill programs.
Highlights from the 2022  PFS included annual production of 160,000 ounces over a lifespan of 10 years and an all-in-sustaining cost of US$882 an ounce. That’s up from a previous estimate of 115,000 ounces.
The PFS envisages initial capital expenditure of $435 million, including mine pre-production, processing and infrastructure, tailings facility, ancillary buildings and water management.
O3 has said it planned to launch a feasibility study this year at Marban Alliance after obtaining results of bridging and optimization engineering from the standalone scenario presented in the pre-feasibility study. The company previously said it hoped to be in production by 2026.
In June, 2023, the company released a maiden resource estimate for the 100%-owned Malartic Horizon project. Malartic Horizon is a separate asset from Marban Alliance. It is located between the northwestern extensions of the Marbenite and Norbenite shears, which host most of the resources on the Marban Alliance project. It is also located within five kilometres of a proposed processing plant described in the Marban pre-feasibility study.
Malartic Horizon contains an estimated open-pit inferred resource of 342,000 ounces of gold, grading 1.04 g/t. The estimate is based on 29,000 metres of drilling in 103 holes.
The Malartic Horizon deposit has a recognized strike length of 950 metres, 300 metres wide and down to a vertical depth of 500 metres.