Prime Mining unveils $25 million bought deal

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Prime Mining Corp. [PRYM-TSXV; PRMNF-OTC] said Wednesday April 7 that it is raising $25 million from a bought deal private placement of 8.5 million units priced at $2.95 unit.

The company said net proceeds from the offering will be used for exploration and development of the company’s flagship Los Reyes Project in Sinaloa, Mexico. Prime also said it had been informed that Canadian mining executive Pierre Lassonde intends to participate in the offering.

Under the terms of the offering, each unit will consist of one common share and one-half of one common share purchase warrant. Each warrant is exercisable for one common share at an exercise price of $5 for a period of 36 months after the closing date, which is expected to be around April 27, 2021.

The underwriters have been granted a green shoe option to acquire up to an additional 15% of the number of units purchased in the offering. This option is available at any time prior to 48 hours before the closing date.

Prime shares advanced on the news, rising 1.7% or $0.05 to $3.05 on volume of 570,740. The shares are trading in a 52-week range of $3.34 and 37 cents.

Prime Mining describes itself on its website as an ideal mix of successful mining executives, strong capital markets personnel and experienced local operators who are working together to build a low-cost, near-term gold mine at the historically productive Los Reyes project. The company said it has a well-planned capital structure with significant team and insider ownership.

Los Reyes is situated on 37 contiguous claims covering 6,300 hectares, located about 43 kilometres south east of the mining centre of Cosala, Sinaloa. Mining activity in the region dates back to the 1700s.

Prime completed the acquisition of the project from Vista Gold Corp. [VGZ-TSX, NYSE American], in a deal that included the buy-back of two separate 2% net smelter royalties and a 49% back-in right on underground mining.

The project is currently estimated to contain a resource of 19.7 million tonnes of grade 1.00 g/t gold and 26.2 g/t silver or 633,034 ounces of gold and 16.6 million ounces of silver.

The company said “tens of millions” have already been spent on exploration and engineering studies. So far seven open pit deposits have been delineated. It also said the potential exists for both resource expansion along strike, down dip, at depth and in new areas.

 


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