Paycore upsizes bought deal offering to $16 million

Paycore Minerals Inc. [CORE-TSXV] on Friday announced details of an upsized bought deal offering that will raise $16 million with proceeds earmarked for the company’s FAD property in Nevada. The company originally expected the offering to raise $8.06 million. But due to strong investor demand a syndicate of underwriters has agreed to purchase 9.82 million common shares of the company for $1.63 per share on a bought deal basis. Total proceeds are expected to be just over $16 million.

Paycore said it has granted the underwriters an option to purchase an additional 15% of the offering to cover overallotments. The option remains open for 30 days from the date of closing which is expected to occur on February 9, 2023.

Paycore shares were active on the news, easing 5.4% or 10 cents to $1.75. The shares are currently trading in a 52-week range of $2.15 and 77 cents.

Paycore’s flagship asset is a 100% interest in the FAD project, which is located in the Ruby Hill Mining District, Eureka County, Nevada, a region with a history of high-grade carbon replacement deposit (CRD) production that began in the 1860s and spanned a period of more than 100 years.

Polymet said FAD represents one of the highest-grade polymetallic deposits in North America and is thought to boast excellent expansion potential. The proximity of the property to the town of Eureka, means it benefits from established infrastructure, including a shaft, roads and old buildings. FAD was previously owned by Barrick Gold Corp. [ABX-TSX, GOLD-NYSE], which acquired the project via its acquisition of Homestake Mining in 2001.

But aside from establishing an underground polymetallic resource, the company sees other opportunities at the FAD project. They include the potential to define a near-surface oxide gold resource within about 200 metres from the historic mine workings.

Another opportunity stems from the project’s location directly south of i-80 Gold Corp’s [IAU-TSX, IAUX-NYSE] Ruby Hill project, which hosts the Archimedes Pit and was previously operated by Barrick Gold. The Archimedes Pit produced about 1.4 million ounces of gold.

News that i-Gold has discovered high-grade polymetallic CRD mineralization in the Hilltop Zone at Ruby Hill, could have implications for Paycore if i-80 Gold decides to convert its existing processing plant from a mill/leach facility into a base metal flotation plant capable of processing lead-silver and zinc concentrates. Such a facility could also be used to process material from the FAD property.

It is a scenario that would dramatically reduce the capital cost of any future mining operation at FAD.

Nevada accounts for nearly 80% of the gold production from the United States. However, it can also boast a long history of base metals mining from the Eureka District.

The Eureka district, where FAD is located, is characterized by gold-silver-lead polymetallic CRD and Carlin-type gold deposits.