Abitibi Metals boosts resource by 62% at B26 polymetallic deposit in Quebec
Indicated resources increased to 11.3 million tonnes from 6.9 Mt.
Mongolia-focused gold explorer Erdene Resource Development (TSX: ERD) is set to receive a C$15 million investment from Canadian mining billionaire Eric Sprott as part of its recently announced C$20 million private placement.
The private placement consists of the sale of approximately 33.33 million subscription receipts at a price of C$0.45 each to an entity controlled by Sprott, and the concurrent sale of up to 11.11 million units of the company, also at a price of C$0.45 each. Sprott currently does not own any securities of the company.
Each subscription receipt is convertible into one unit, each consisting of one common share of the company and one warrant, with each warrant exercisable into one common share at a price of C$0.60 per share within two years of the closing date.
The Bayan Khundii gold project is targeted for first production in early 2022
Erdene will use proceeds of the private placement to advance its flagship Bayan Khundii gold project, which is targeted for first production by early 2022. The project is located in southwest Mongolia, where the company has interests in three mining licenses and three exploration licenses covering a total of 2,309 hectares in the Khundii Gold District.
A prefeasibility study (PFS) on the Bayan Khundii deposit published in October 2019 showed a significant increase in resources over past estimates, with 520,700 ounces of gold in the measured and indicated category at an average grade of 3.16 g/t. Average annual gold production is expected to reach 61,000 ounces.
“We are very pleased to have Mr. Sprott as a significant shareholder of Erdene,” president and CEO Peter Akerley said in a press release.
“His investment is a strong endorsement of Erdene’s high-grade Bayan Khundii gold project and the prospectivity of our 100% owned Khundii Gold District. Funds from this financing will be used to initiate early construction works at Bayan Khundii and continue exploration to expand our high-grade resources.”
Shares of Erdene Resource Development jumped 12% on the TSX by midday Friday, capping the company at C$107.7 million.
