Freegold closes half of $10M financing
Sprott agrees to invest $6M in Alaska focused gold explorer North of 60 Mining News – May 29, 2020
Last updated 9/26/2020 at 2:40pm
Freegold Ventures Ltd. May 26 announced that it has closed C$5 million of an up to C$10 million financing, which will fund ongoing exploration and other work related to its Golden Summit and Shorty Creek mineral exploration properties in Alaska.
Noted resource investor Eric Sprott has agreed to invest a total of C$6 million in Freegold's private placement, including C$2 million in the recently completed initial tranche and C$4 million in a second tranche expected to close on June 2.
The first tranche included the issuance of 20.9 million Freegold units at a price of C17 cents apiece. Each unit consists of one share and half a warrant, with each whole warrant allowing the holder to acquire an addition Freegold share for C28 cents for two years.
In addition to the units, Freegold issued 8.5 million subscription receipts at C17 cents each, with each receipt convertible into a Freegold share and half-warrant without any further payment.
Sprott acquired 3.25 million of the units, which increased his fully diluted ownership interest in Freegold to 19.9%. The balance of Sprott's investment will be completed with the purchase of subscription receipts, which if converted, will increase his interest in the company to roughly 28.4%, assuming the second tranche private placement is also fully subscribed.
Freegold intends to use the net proceeds from the private placement to fund ongoing exploration, to update the company's technical studies, and for general corporate purposes.
In April, Freegold announced that one hole drilled during a winter drill program at its Golden Summit property about 25 miles north of Fairbanks cut 188 meters averaging 3.69 grams per metric ton gold, including two meters averaging 169.5 g/t (4.9 oz/t) gold.
The winter drill program, however, was suspended about midway through the second hole due to COVID-19.
Drilling at Golden Summit is expected to restart in mid-June, which takes into account 14-day quarantine measures for people travelling into Alaska. Freegold said it is putting together a comprehensive safety plan designed to mitigate the risks of transmission of the COVID-19 virus amongst our contractors and community.
In addition to Golden Summit, Freegold is exploring Shorty Creek, a porphyry copper-gold project about 75 miles northwest of Fairbanks. Last year, South32 Ltd. entered into an option agreement to acquire 70% interest in Shorty Creek for US$30 million, less any money the Australia-based major invested in exploring the promising copper-gold-silver-tungsten deposits that have been identified across the property. To keep the option in good standing, South32 has agreed to fund up to US$10 million on exploration over a four-year span. Last year South32 invested US$2.3 million in exploration at Shorty Creek and has budgeted a minimum of US$2 million to further explore the copper-gold-silver-tungsten project this year.