North of 60 Mining News - The mining newspaper for Alaska and Canada's North

International Tower Hill Mines Ltd. March 14 announced that it has raised US$12 million to continue the optimization and environmental baseline studies for its Livengood gold project in Interior Alaska, and for general working capital purposes.

"I am pleased to continue the technical work that can potentially improve and certainly will serve to de-risk the Livengood gold project," said Tower Hill CEO Karl Hanneman. "ITH has unique and positive fundamentals, given our land status and proximity to Fairbanks, size of the gold resource and the leverage opportunity for gold investors."

The non-brokered private placement involved the issuance of 24 million shares at US50 cents each.

Electrum Strategic Opportunities Fund II, a new Tower Hill investor, acquired 19.89 million shares. This gives the investment fund managed by The Electrum Group a 10.7 percent stake in ITH.

"ITH is an excellent fit for Electrum. Its multi-million-ounce Livengood gold project located in Alaska, the second largest gold-producing state in the US, is exactly the type of project we seek to invest in," said Electrum President Igor Levental. "Furthermore, what makes ITH particularly special among developers in the precious metals space is its management team with an exceptional track record of advancing and permitting mines in Alaska, a strong board with an incredible depth of experience in taking assets up the value chain in a disciplined fashion and top tier long-term value-oriented investors involved with the company."

The 4.1- million balance of shares issued by Tower Hill were acquired by Paulson & Co. Already a major ITH shareholder, Paulson now owns 32 percent of Tower Hill's issued and outstanding shares.

To stretch the money raised, the Tower Hill board approved recommendations by management to further reduce corporate overhead costs beginning in 2018. These decreases include a 50 percent cut to the CEO salary, reflecting a reduction in the needed CEO duties; a lowering of board member cash compensation and expense; and staff reductions when critical work is completed.

Depending upon the level of technical work or permitting efforts, these cost savings are expected to lower general and administrative costs to around $2.5 million per year.

Tower Hill said stretching the funds it has on-hand will help provide the time necessary for the gold market to reward patient investors.

"This financing uniquely positions ITH with sufficient financial resources for the next four to five years as we continue to advance the Livengood Gold Project towards one day becoming one of North America's biggest gold mines," said Tower Hill Chairman Marcelo Kim.

The Tower Hill board has approved a $5.1 million budget for 2018.

The work program incorporated in this budget will build upon the metallurgical studies undertaken in 2017, which is expected to further define and refine the project flowsheet.

Using improved mineralization and alteration models for the Livengood gold deposit resulting from the work completed in 2017, 4,000 kilograms (8,818 pounds) of metallurgical composites have been collected from select areas of the 11.5-million-ounce gold deposit. Portions of these samples will be processed in 2018 to determine whether different recovery or cost parameters should be applied to various portions of the orebody. Work is also planned to advance the environmental baseline efforts needed to support future permitting.

Located about 70 miles north of Fairbanks, the Livengood project hosts 525.4 million metric tons of measured and indicated resource averaging 0.68 grams per metric ton (11.5 million oz) gold.

–SHANE LASLEY