Canadian mining company RNC Minerals is entering a new financing round to provide capital for the company’s acquisition of Westgold Resources’ Higginsville gold operation in Western Australia.
RNC intends to raise just over $C12 million ($12.6 million) to help fund the acquisition.
Westgold announced this week that it had agreed to sell the Higginsville operation to RNC for $50 million, including a $25 million cash payment and $25 million in RNC shares.
This share allocation would allow Westgold to reap the benefits of RNC’s Beta Hunt nickel-gold mine in the Kambalda district of Western Australia, around 600 kilometres from Perth.
RNC intends to use Higginsville’s gold mill to provide a low-cost milling option for Beta Hunt, with cost savings estimated at $C15 a tonne.
The Beta Hunt mine, which is 100 per cent-owned by RNC subsidiary company Salt Lake Mining (SLM), made headlines last year on account of its ‘bonanza-grade’ gold finds.
These included the transformative discovery in September 2018 of a 95 kilogram-stone containing around 2440 ounces of gold and a 63 kilogram stone containing around 1620 ounces of gold for a combined worth of nearly $US5 million ($6.8 million). SLM acquired the Beta Hunt mine in 2013 from former owners Gold Fields for $10 million.
In addition to funding for the Higginsville acquisition, the funds will also be allocated for exploration drilling and development of Beta Hunt, as well as general working capital.
RNC stated that its raising, which was announced via the Toronto Stock Exchange (TSX) on Tuesday, would involve the sale of just under 24.5 million common shares in the company at a price of 49 cents a share.
The company will also include the option to purchase a further 3.67 million shares for a period of 30 days after the closing date, which is expected to be on or around April 18.