Altaley Mining Corporation (TSX-V:ATLY) told investors it has closed the first tranche of its non-brokered private placement financing for gross proceeds of $4,240,703 as it advances the construction of its Tahuehueto gold and base metal mine in Mexico.
Under the private placement, Altaley said it issued 12,116,296 units at $0.35 each, with each unit consisting of one share and half of one transferable share purchase warrant, with each whole warrant entitling the holder to acquire an additional share for $0.55 within two years.
Apart from ramping up mining and milling operations at the Tahuehueto mine, the company said proceeds from the placement will be used for general working capital purposes.
READ: Altaley Mining reports updated PFS for Tahuehueto mine ahead of pre-production due to start this month
At Tahuehueto, Altaley said the first ball mill has now successfully completed its initial dry testing phase and has been deemed ready to process ore. The flotation circuit has been successfully wet tested, and various mill components such as thickening tanks, concentrate filters, and tailings thickeners are ready and available to start production.
Final work is in process and expected to be completed within the next week on the waterline to supply water to the mill after which, the mill is expected to start pre-production ore processing operations using the first ball mill with up to 500 tonnes per day (tpd) capacity. The second ball mill will be installed in the coming months to allow the mine to ramp up to its build capacity of 1,000 tpd during the third quarter of 2022, the company said.
Underground development is well advanced with numerous working faces available to easily provide ongoing ore feed to the mill at 1,000 tpd. To date, Altaley noted that previous pre-production mining plus current underground development mining has stockpiled approximately 24,000 tonnes of ore which is ready to feed the mill.
"The start of pre-production mining at Tahuehueto will be one of Altaley's most important milestones and is the culmination of many years of hard work advancing this project through its exploration and development phases and as we go into the final stretch of construction to install the second ball mill allowing Altaley and its shareholders to participate in and realize the benefits of a substantial increase in the company's revenue from a robust new gold mine,” the company’s president Ralph Shearing said in a statement.
Altaley said it intends to close the remaining $759,296 second tranche of the private placement under the same terms as the remaining private placement subscription agreements and proceeds are received.
The Tahuehueto mine sits 250 kilometres (km) northwest of the city of Durango and 25 km north of the Topia polymetallic-silver mine, 48 km northwest of the La Cienega gold, silver, base metal mine and 150 km northwest of the San Dimas mining district, most notable for the Tayoltita silver and gold mine.
Altaley also operates the Campo Morado polymetallic base metal mine, which is currently producing at an average of 2,200 tpd and is currently estimated to be Mexico's sixth-largest zinc producer.
Contact the author at stephen.gunnion@proactiveinvestors.com