Pure Gold Mining Inc (LON:PUR)(CVE:PGM), the Ontario focused mine developer, said Thursday it had closed its previously announced bought deal offering and concurrent placing and raised C$47.5 million.
The London and Toronto listed group is on the cusp of becoming a producer of the metal; targeting first gold in the second half of next year (2020).
"This new capital gives us the financial flexibility to continue development work, and pursue an aggressive exploration program with the goal of resource expansion," Pure Gold Mining CEO Darin Labrenz told investors.
READ: Pure Gold Mining boosts capital raise to C$45.5mln with the help of the world’s third largest gold producer, AngloGold
"As the highest grade development project in Canada, Madsen joins part of a small, elite group of high-grade mining projects located in ideal jurisdictions," he added.
As reported last month, the firm put together a C$32.5mln fundraising in a bought deal lead by Sprott Capital Partners and a syndicate of underwriters.
Then, it emerged this week, that mining titan AngloGold Ashanti (NYSE:AU) and an institutional investor would together put up a further C$13.3mln via a non-brokered placing.
Pure Gold said Thursday that under the offering, it issued over 62.7 million units at C$0.55 a throw, for total gross proceeds of around C$34.5 million. Eric Sprott, via his company 217642 Ontario Ltd, bought 36 million units for C$19.9 million.
Meanwhile, in the placing, the company issued over 23.7 million units at C$0.55 each for aggregate gross proceeds of C$13,035,000. AngloGold bought over 11.8 million units and now owns 14.1% of the firm.
"We are also delighted to welcome Eric Sprott to the share registry as a 10% shareholder," added Labrenz. "Mr Sprott is now the 2nd largest shareholder of Pure Gold behind AngloGold Ashanti and joins key strategic shareholders including Rob McEwen and Newmont Goldcorp, which collectively hold more than 30% of the float."
The company boss added that with the completion of these transactions, it had no need for additional equity as it continue to develop the Madsen project into a "rising gold market".
Situated in one of the most famous gold mining jurisdictions in the world, Madsen's gold grade of nine grams per tonne is eye-catchingly high.
WATCH: Proactive Investors takes closer look at Red Lake, Ontario Mining District
As it stands, the reserve rings in at one million ounces, and will support a 12-year operation mining at a peak production rate of 125,000 ounces per year.
All-in sustaining costs are estimated at US$787 per ounce, allowing for plenty of margin on the current gold price of just over US$1,400.
Madsen covers 47 square kilometeres and is host to two significant past producing mines, which together have already produced 2.5 million ounces of gold. There is already a mill and tailings facility, paved highway access, power, a shaft, and ramp, among other vital infrastructure.
Shares in Pure Gold added around 5.4% in Toronto to stand at $0.59.
Contact the author at giles@proactiveinvestors.com
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