Spanish Mountain raising $3.38 million for B.C. gold project

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Spanish Mountain Gold Ltd. [SPA-TSXV, S3Y-FSE] said it intends to complete a non-brokered private placement offering of flow-through units valued at $1.87 million or 24 cents per unit, plus another $1.51 million worth of units priced at 21 cents each, for total proceeds of $3.38 million.

The company said proceeds of the offering will be used for exploration and development at the company’s 100%-owned multi-million-ounce Spanish Mountain Gold Project, where the company has said it is moving towards construction of the next gold mine in the Cariboo Gold Corridor, British Columbia.

Under the terms of the financing, each flow-through unit will consist of one common share that will qualify as a flow-through share as defined in the Income Tax Act (Canada) and one-half of one common share purchase warrant, which will also qualify as a flow-through share.

Each whole warrant will entitle the holder to acquire one (non-flow-through) common share of the company for 25 cents per share for 24 months, subject to earlier expiry if the 10-day volume-weighted average share price of the shares exceeds 30 cents per share.

Each unit will consist of one common share and one-half of a warrant.

The project is located about 6.0 kilometres from the village of Likely, approximately 70 kilometres north-east of Williams Lake. The project benefits from all weather road access throughout the entire year, power infrastructure and its proximity to a power substation. Other mining operations in the region, includes Imperial Metals Corp’s (III-TSX) Mount Polley and Taseko Mines Ltd’s [TKO-TSE] Gibraltar.

A pre-feasibility study completed in the second quarter of 2021, prioritizes the development of a near-surface/higher grade multi-million ounces reserve as a stand-alone operation. The PFS envisages an operation with a mine life of 14 years and total production of 2.1 million gold ounces.

That would include average annual production of 180,000 ounces (first six years) and 150,000 ounces over the life of the mine.

The company said excellent infrastructure and access of the project’s location translates into modest initial capital requirements of $607 million for the construction of a sizeable operation (mill throughput of 20,000 tonnes per day).

Proven and probable reserves at the site stand at 95.9 million tonnes of grade 0.76 g/t gold, or 2.34 million ounces of gold, and 0.71 g/t silver or 2.18 million ounces of silver.

The company has said its immediate focus is to conduct an integrated Whittle enterprise optimization to identify the highest potential value-add improvements while increasing the understanding of the high-grade geologic controls and associated drill targets that could upgrade and expand the gold resource.

The company has said it is striving to be a leader in community and indigenous relations by leveraging technology and innovation to build the greenest gold mine in Canada.

On Tuesday, Spanish Mountain shares were unchanged at 20 cents and trade in a 52-week range of 28.5 cents and $0.105.

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