Photo by: Northquest
TORONTO (miningweekly.com) – TSX-V-listed explorer Northquest on Monday announced that it had entered into a private placement to sell a 22.3% interest in the company to Russian miner Nord Gold for C$2.5-million.
Toronto-based Northquest, which owns the Pistol Bay gold project, a high-grade exploration project located in Nunavut, on the west coast of Hudson Bay, said Nord Gold would buy 12.77-million units in two tranches, including warrants to buy a further 6.38-million common shares within two years.
Under the agreement, Northquest would sell 2.77-million units, each comprising a common share and half a warrant for a common share for C$0.18 apiece, with each whole warrant enabling the holder to buy a common share at a strike price of C$0.24.
Under the second tranche of the placement, Northquest would issue ten-million units to Nordgold at C$0.20 apiece, with each unit comprising a common share and half a common share purchase warrant at a strike price of C$0.27 apiece.
Concurrent with the closing of the second tranche, Nord Gold would have the right to appoint a representative to Northquest’s board and the right to participate pro rata in all equity issuances by Northquest, subject to certain conditions.
In 2013, Nord Gold’s gold output increased to 924 000 oz from 717 000 oz in 2012. The miner operates nine mines in Russia, Kazakhstan, Burkina Faso and Guinea, and has two development projects, four advanced exploration projects and a diverse portfolio of early exploration projects and licences in the Russian Commonwealth, West Africa and French Guiana.
Northquest’s TSX-V-listed stock rallied 38.46% in early trading on Monday to C$0.18 apiece.