Sabina Gold & Silver Corp. has reached a deal with BMO Capital Market to raise $75 million for exploration work in Nunavut, northern Canada.
Under the deal, announced Tuesday morning, the company will sell 9.091 million common shares at $5.50 per share, and 3.79 million flow-through shares at $6.50 per share. The buyers have the option to purchase an additional 15% of the common shares.
Proceeds of the sale will be used primarily to advance Sabina’s Hackett River and Back River projects. On its website the company describes Hackett River as “one of the largest undeveloped VMS deposits in the world … analogous to the Kidd Creek and Noranda deposits.” A 2009 PEA says the property would produce concentrates containing 182.8 million ounces of silver, 5.8 billion pounds of zinc, 311 million pounds of copper and 300,000 ounces of gold for a 16-year mine life.
A 20,000-metre drilling program on the Back River property was expanded in 2010 by $5 million due to new discoveries at the Llama and Umwelt deposits, where a combined 115 holes were drilled. NI-43101-compliant resource updates are expected in early 2011 once all assays have been received.
The company’s stock gained two cents to close at $5.77 on the TSX in Tuesday’s trading.