The deal also meant the company's largest shareholder, AngloGold Ashanti, increased its share of Pure Gold to 19.9%.
On January 27, Pure Gold announced it had entered into an agreement with National Bank Financial, which was the lead underwriter - on behalf of a syndicate of underwriters that includes Clarus Securities. Tamesis Partners was acting as special selling agent in the UK and Europe.
The company offered a private placement of nearly 17 million shares at a price of C$0.53 per share for a gross proceed of approximately C$9 million. The underwriters were also offered an option to purchase an additional 9.4 million shares, increasing the gross proceeds to the company by another C$5 million.
In addition, Pure Gold agreed to a concurrent private placement of 30.2 million shares at the offering price to its largest shareholder, AngloGold Ashanti. This would increase AngloGold Ashanti's share in Pure Gold by 5% to an equity interest of 19.9%.
The transactions were expected to close on February 15, 2022. Once completed, the additional funding would enable the company to ramp up operations at its gold mine. Recent drilling results announced by Pure Gold confirmed the presence of high-grade gold. The best assay was 63.5 grams per tonne of gold over 1m.
Based in Canada, Pure Gold Mining owns and operates an underground mine in Red Lake, Ontario, where it began gold production towards the end of 2021. The company is targeting production in the range of 600-700 tonnes per day in the first quarter of 2022 following a challenging year due to COVID-19 restrictions.
On January 27, Pure Gold Mining traded on the TSX at C$0.58/share, the first time the price had fallen below the C$0.60 mark in the past year.
