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Argonaut Gold (TSX: AR) has completed a bought deal private placement of 19.8 million flow-through common shares to raise total proceeds of C$51.8 million ($40.8m).
This amount includes the full exercise of an over-allotment option to purchase an additional 2.6 million shares (15% of the original amount, as announced in its press release on February 14).
The placement was conducted per the terms of an agreement between Argonaut and a syndicate of underwriters led by BMO Capital Markets, and including Cormark Securities, Canaccord Genuity, RBC Dominion Securities, Scotia Capital and Echelon Wealth Partners.
Net proceeds of this financing will be used to fund exploration and development activities at Argonaut’s Magino project, as well as for general corporate purposes.
Magino is a past producing underground gold mine located 40 km northeast of Wawa, Ontario. A feasibility study published in December 2017 showcased an open pit mining opportunity, boasting measured and indicated resources of 144 million tonnes grading 0.91 g/t gold for 4.2 million oz. of contained gold.
Construction is underway to bring the Magino mine back into production, which is initially estimated to cost C$510 million. However, Argonaut recently revised the capital cost to C$800 million after taking inflation into account and making adjustments to the project’s development plan.
To date, the company has invested about C$342 million ($270m) into the Magino project.
(This article first appeared in The Northern Miner)
