QMX Gold up 17% on bought deal financing news

QMX owns the Aurbel gold mill and tailings facility located 15 km east of Val d’Or, Quebec. Source: QMX Gold Corp.

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QMX Gold Corp. [QMX-TSXV; QMXGF-OTCQX] on Tuesday February 25 announced details of a $6 million bought deal offering that will be used to fund exploration in Quebec. The company also said financier Eric Sprott and O3 Mining Inc. [OIII-TSXV; OQMGF-OTC] are expected to make strategic investments in connection with the offering.

QMX shares rallied on the news, rising 17.4% or $0.02 to 13.5 cents on volume of over 3.0 million. The shares are currently trading in a 52-week range of $0.04 and 13 cents.

Backed by a shareholder group that includes Eldorado Gold Corp. [ELD-TSX; EGO-NYSE], Osisko Gold Royalties Ltd. [OR-TSX, NYSE] and Probe Metals Inc. [PRB-TSXV; PROBF-OTCQB], QMX is applying a systematic and methodical approach to targeting, drilling, and evaluating an extensive land package across 200 km2 in the Val d’Or mining camp.

In addition to the land package, QMX owns the Aurbel gold mill and tailings facility, which is located 15 km east of Val d’Or.

On Tuesday, QMX said a syndicate of underwriters led by Canaccord Genuity Corp. and Mackie Research Capital Corp. have agreed to purchase 33.3 million flow-through units of QMX on a bought deal private placement basis at 18 cents per unit, generating gross proceeds of $6 million.

Each flow-through unit consists of one common share of QMX which will qualify as a flow-through share under the Canadian Income Tax Act, and one half of a common share purchase warrant to be issued on a non-flow through basis.

Each whole warrant entitles the holder to acquire one common share of QMX at $18 cents for two years after the closing date. In addition, the underwriters have been granted a green shoe option to sell up to an additional 4.9 million flow-through units at the issue price, potentially raising another $899,991. The offering is expected to close by March 18, 2020.

In July, 2019, QMX announced a NI 43-101-compliant resource estimate for its Bonneford South property, which is located on the eastern portion of QMX’s land package, about 25 km east of Val d’Or and less than 25 km from the Aurbel mill. According to the estimate, the property hosts an Indicated Resource of 4.75 million tonnes at 1.69 g/t gold or 258,700 ounces. On top of that is an Inferred Resource of 2.4 million tonnes at 1.87 g/t gold or 145,100 ounces.

Back in December, QMX announced the first results from a planned 6,000-metre fall drilling campaign on the Bonneford deposit. Highlights included 44.95 g/t gold over 5.6 metres and 10.7 g/t gold over 11.2 metres in an area called the Bonneford intrusive.

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