Miramar lands Con funding

VSE-listed Miramar Mining has secured funding for its purchase of the Con mine in Yellowknife, N.W.T.

Sprott Securities and Yorkton Securities agreed to buy, through a bought deal, 11.25 million special warrants from the company at $4 each for total proceeds of $45 million.

Miramar has agreed to buy the mine from Nerco Minerals, now a subsidiary of Kennecott, for US$25 million. It will do so through Red Lion Management, a private company controlled by Walter Berukoff who is also president of Miramar.

In return for completing the purchase, as well as indemnifying Nerco and its affiliates against environmental liabilities, Red Lion will receive 2.5 million shares of Miramar plus costs.

Each special warrant in the proposed financing is convertible into one common share of Miramar and half a warrant. One warrant gives the holder the right to buy an additional unit at $5 for nine months following receipt of a final prospectus qualifying the issue.

The $5 unit includes a share plus an additional warrant to buy one share at $6, expiring six months after the $5 warrants expire.

Following the purchase and following payment of commissions and legal fees, Miramar expects to retain about $9 million in working capital. If all the warrants are exercised, the company will receive a further $61.9 million. The Con property covers 26 square miles of ground over several mineralized shear structures within the Yellowknife Greenstone Belt. The mine produced 120,000 oz. gold last year, bringing total historic production to more than 4.7 million oz. since start-up in 1938.

Proven and probable reserves are estimated at 3.5 million tons grading 0.31 oz. gold per ton.