Canyon Resources (ASX: CAY) is raising up to A$2.2 million to fund drilling programs for its Tao and Pinarello gold projects in Burkina Faso.
The first part of the raising consists of a placement of up to 9.3 million shares priced at $0.13 to raise $1.2 million that has received strong support from Canyon’s existing shareholders as well as a number of new sophisticated and professional investors.
Canyon will raise the remaining $1 million through a Share Purchase Plan to existing shareholders.
Each share comes with an attaching listed option maturing on 29 February 2016 and exercisable at A$0.16.
Hartleys Limited is the lead broker to the placement and the SPP.
Recent drilling by Canyon has returned a high grade intercept of 4 metres at 42.8 grams per tonne gold at the Tao Project.
Other notable results from the 3,058 metre reverse circulation drilling program over the Tondoby Prospect, which has a strike length of 3 kilometres, include 12 metres at 3.04g/t gold and 20 metres at 1.97g/t gold.
Drilling has also increased Canyon's understanding of the geological controls on mineralisation and gold lode geometries, opening up additional areas for drill testing that may identify a high grade zone that was previously thought to be un-mineralised.
The highly prospective Tao project is close to Volta Resources' (TSX: VTR) 4.2 million ounce Kiaka project, Orezone Gold Corporation's 3.5 million ounce Bombore deposit and High River's 2 million ounce Taparko project.
The Tao project lies in the Gorouol Greenstone Belt which hosts the country’s largest deposit, the major Essakane gold mine. Reverse circulation drilling done previously by Canyon at Tao has intersected high grade gold mineralisation including 8 metres at 30.4g/t and 8 metres at 10.31g/t.
Pinarello Project is located in the Houndé Gold Belt that is host to several high grade gold discoveries, including those made by Samara Resources and Orbis Gold (ASX: ORS) on permits immediately adjacent to Canyon’s permits.
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