RNC raising $18 million for Australian operations

A 62-kilogram sample of native gold found at the Beta Hunt Mine in Australia. Source: RNC Minerals Corp.

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RNC Minerals Corp. [RNX-TSX] has announced details of an $18 million bought deal financing, arranged with an underwriting syndicate led by Haywood Securities Inc.

In an announcement that came after the close of trading on August 26, 2018, RNC said the underwriters have agreed to purchase on a bought deal basis, 45 million common shares of the company at 40 cents a share. The underwriters have been granted a green shoe option to purchase up to an additional 6.75 million shares to cover over-allotment options.

The company said the net proceeds are earmarked for the continued ramp-up of production at the company’s Beta Hunt Mine and the integration with the Higginsville Gold Operations (HGO), both located in western Australia, about 100 kilometres from Kalgoorlie.

On Tuesday, RNC shares reacted to the news by easing 5.81% or $0.025 to 40.5 cents on volume of over 5.0 million. The shares are currently trading in a 52-week range of $0.075 and $1.18.

News of the financing comes after RNC said it has begun mining at its Baloo Stage 1 open pit, a project that is expected to supply feed to the mill at the HGO. HGO includes a 1.3 million tonne processing facility, a historical mineral resource of 1.9 million ounces, 370,000 ounces of gold reserves and 386 km2 of tenure with gold mineralization potential.

RNC said the Baloo Stage 1 open pit (located on the HGO property) is the first of a series of open pits that the company is looking to put into production in a bid to maximize company-owned source feed for the HGO mill, which will also be used to process material from the company’s Beta Hunt Mine.

The fully funded and permitted Baloo Stage 1 pit is expected to provide the HGO mill with approximately 30,000 tonnes of feed per month until the end of 2019. The Baloo material that has been processed so far has grades ranging between 1.8 to 2.8 g/t gold.

“The commencement of processing of Baloo material through the HGO mill is another big step forward in the transformation of RNC into an integrated multi-mine gold operation and supports our belief in the quality of the resource potential of the nearly 400 km2 HGO land package that we acquired and the growth trajectory of the combined Western Australia operations,” said RNC Chairman and CEO Paul Andre Huet.

“We are looking forward to providing production and cost guidance for the balance of 2019 in the near future,” Huet said.

RNC’s key asset is a 100% interest in the producing Beta Hunt gold mine. RNC attracted international attention last year following news of a once-in-a lifetime gold strike in the Father’s Day Vein at Beta Hunt. The company said it had extracted 9,250 ounces of gold, worth $15 million, from a 130-tonne cut of rock about 500 metres underground at the mine.

The find included a single 95-kilogram chunk that contained 2,400 ounces of gold, worth about $3.8 million. A second 62-kilogram stone contained 1,620 ounces.

RNC said it plans to resume full scale production at Beta Hunt In the third quarter of 2019. Beta Hunt is located 57 kilometres north of the HGO property.

RNC’s other key asset is a 28% interest in a nickel joint venture that owns the Dumont Nickel-Cobalt Project in the Abitibi region of Quebec. This property contains the second largest nickel reserve and ninth largest cobalt reserve in the world.

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