TerraX raises $5 million for NWT gold exploration

Eastbelt mineralized vein next to next to former producing Tom Mine at the Yellowknife City gold project 15 km north of Yellowknife, Northwest Territories. Source: TerraX Minerals Inc.

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TerraX Minerals Inc. [TXR-TSXV, TRXXF-OTC Pink, TXO Frankfurt] said Friday it has raised $5 million for exploration at a Northwest Territories gold project where the company is planning to drill after recently announcing a first mineral resource estimate.

The offering of 20 million shares priced at 25 cents each was made through BMO Capital Markets, which received a cash commission equal to 6% of the proceeds, and has been granted a green shoe option to purchase an additional 10% of the number of shares sold in the offering to cover overallotments.

Concurrent with the completion of the offering, the company said it generated an additional $80,000 by issuing another 320,000 common shares at 25 cents each. It said the shares were issued on a non-brokered private placement basis and are subject to a hold period in Canada that expires on April 20, 2020.

TerraX shares advanced 4% or $0.01 on Friday to 26 cents on volume of 355,190. The shares are currently trading in a 52-week range of 22.5 cents and 50 cents.

Proceeds from the financing will be used to fund exploration expenses at the company’s Yellowknife City Gold Project in the Northwest Territories.

The Yellowknife City Gold (YCG) project covers 772 square kilometres of contiguous land, north, south and east of the City of Yellowknife.

YCG lies on the prolific Yellowknife greenstone belt, covering 70 kilometres of strike length along the main mineralized break in the Yellowknife gold district, including the southern and northern extensions of the shear system that hosted the high-grade Con and Giant gold mines.

The Giant Mine produced 7.0 million ounces of gold from 1948 to 2004.  The Con mine produced over 5.0 million ounces of gold from 1938 to 2003.

The YCG project contains multiple shears that are the recognized hosts for gold deposits in the Yellowknife gold district, with innumerable gold showings and recent high-grade drill results that serve to indicate the project’s potential as a world class gold district.

TerraX recently added to its holdings in the Yellowknife area by striking a deal to acquire the Ptarmigan Mine property.

Ptarmigan is a former mine that produced 112,213 ounces of gold, averaging 9.56 grams per tonne from 1941-43, in 1983, and from 1985 to 1997.

The main Ptarmigan vein was accessed by a shaft extending to a depth of 275 metres. It was mined over a strike length of 400 metres.

When the mine closed in 1997, the vein was still open along strike to the west on claims now owned by TerraX, and open down dip below the mine workings.

“With paved road access from Yellowknife, and high-tension powerlines connected to the former mine site, Ptarmigan, with exploration success, could easily be brought back to life,” said company has said.

On November 4, 2019, TerraX announced a first mineral resource estimate for the Yellowknife City Gold Project. The NI 43-101-compliant resource estimate of 735,000 ounces consists of a pit constrained resource of 11.6 million tonnes of grade 1.4 g/t or 523,000 ounces of gold, and an underground inferred resource of 1.2 million tonnes averaging 5.7 g/t or 212,000 ounces of contained gold.

The estimate covers four gold deposits: Sam Otto, Crestaurum, Barney and Mispickel, which are all located within a 3-kilometre radius. The estimate is based on results of 463 drill holes totalling 90,751 metres. Of that amount, 201 drill holes, covering 42,447 metres were completed by TerraX from 2014 to 2019.

In general, the drilling is variably spaced, reflecting different mineralization styles and ranges from 25 metres to 100 metres apart, the company said.

The Sam Otto deposit is currently the largest deposit of the four. It contains a pit constrained inferred resource of 426,000 ounces of gold (10.8 million tonnes of average 1.23 g/t gold) to a maximum depth of 200 metres.

The company said it is planned a follow-up drill program for Sam Otto in the first quarter of 2020. The company is also planning a drill program to test for the depth extension of the Crestaurum deposit, which is located just three kilometres of Sam Otto.

The drill program is also designed to boost confidence levels by elevating inferred material into the indicated resource category.

Crestaurum hosts a pit-constrained inferred resource of 38,000 ounces of gold (127,000 tonnes averaging 9.41 g/t) to a depth of 45 metres and an underground inferred resource of 153,000 ounces gold (723,000 tonnes averaging 6.56 g/t).

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