Dual-listed Pure Gold, which will pour first gold in Red Lake, Ontario this year, is raising C$15-million for exploration, the company announced on Wednesday.
Pure Gold will issue 9 868 421 charity flow-through common shares at C$1.52 a share.
Canadian investor Eric Sprott, who is a strong supporter of Pure Gold’s vision, has agreed to be the back-end buyer of all shares.
"PureGold's mine in Red Lake has over 7 km of strike with known high-grade shoots that have only been defined down to 1 200 m compared to 2 500 m in the neighbouring Red Lake mine complex.
“The ultrahigh-grade hits in the 8 zone remind me a lot of the HG Zone that built Goldcorp, as well as SMC at Macassa and the Swan Zone at Fosterville. These are the types of discoveries that have the potential to be company makers and tend to lead to a much higher production profile than originally given credit,” said Sprott in a statement.
Pure Gold CEO Darin Labrenz said the new investment in exploration enabled the company to concurrently ramp up its focus on aggressive resource growth without impacting on its capital budget for final mine completion and first gold pour.
“We believe this combination of near-term cash flow through production and organic resource growth will create significant value for our shareholders in the near term,” he said.
Pure Gold is fully funded and on track to pour its first gold at Madsen, in Red Lake, in the fourth quarter.
Meanwhile, Sprott invested in several other small companies on Tuesday, including mineral explorer Summa Silver, which owns properties in Nevada and British Columbia, Magna Gold, which has precious metals properties in Mexico and Dolly Varden, which has assets in British Columbia.