A private placement of 11.2 million special warrants has netted more than $20 million for Loki Gold (TSE), clearing the way for heap-leach production at the Brewery Creek gold project in the Yukon.
Each special warrant converts, at no additional cost, into one common share, and the company is filing a preliminary prospectus to qualify the issue of the shares.
Proceeds from the placement, combined with a US$26.5-million loan arranged by N.M. Rothschild & Sons, will cover the $41-million capital cost of the project.
Loki expects to begin heap leaching next summer at an annual rate of 80,000 oz. and an average cost of US$173 per oz. The operation is expected to last eight years.
Reserves are estimated at 16.7 million tonnes grading 1.48 grams gold per tonne, with an overall stripping ratio of 1.2-to-1.
With the completion of the private placement, Loki has just over 40 million shares outstanding (44 million fully diluted).
Previously announced plans to merge the company with Baja Gold (TSE) are on hold until the preliminary prospectus is completed.
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