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Falco Resources to raise up to $7 mln via marketed offering for Horne assets

Falco Resources to raise up to $7 mln via marketed offering for Horne assets

Falco Resources (CVE:FPC) is raising up to C$7 million through a marketed offering, the company said late Wednesday, with the proceeds to be used to advance its Horne 5 project in Quebec.

The agreement, with a syndicate of agents led by Scotia Capital, will see the agents raise the cash through a combination of flow through shares and common shares from Falco.

The company said that final pricing and the number of flow through and common shares will be determined in the context of the market.

The agents will also have the option to buy up to an additional 15 percent of Falco shares on the same terms as the offering, for up to 48 hours prior to closing.

Aside from Falco's Horne 5 deposit, the new funds will also be used for further exploration at its Rouyn-Noranda complex, as well as for general working capital needs.

The deal is expected to close on about October 22, subject to regulatory approvals.

Falco is one of the largest claim holders in the province of Quebec, with extensive land holdings in the Abitibi Greenstone Belt. It owns 72,800 hectares of land in the Rouyn-Noranda mining camp, which represents 70 percent of the entire camp and includes 14 former gold and base metal mine sites.

The company's principal property is the Horne Mine Complex, which was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. Falco is hoping to replicate this with its Horne 5 deposit, the largest undeveloped deposit in the region. 

Its current strategy is focused on identifying opportunities to increase the size of the resource estimate within its Horne complex, while also working on exploration targets within the remainder of its large land package.

The company recently appointed Sean Roosen, the former chief executive of Osisko Mining and current CEO of Osisko Gold Royalties, as its new chairman. The move significantly strengthened Falco's board, and positioned the company on a path to success with regards to developing its Horne mine assets. 

Roosen has been chairman and CEO of Osisko Gold Royalties since June of this year. Prior to this, he was the president and chief executive officer of Osisko Mining, which he co-founded, before the company was acquired by Yamana Gold (TSE:YRI) and Agnico Eagle Mines for C$3.9 billion earlier this year. The joint offer saw off a hostile bid for Osisko's giant Canadian Malartic mine in Quebec by mining giant Goldcorp (TSE:G). 

The new Falco chairman drove the success of Osisko from a junior exploration company to one of the biggest intermediate gold producers. 

Over that period, he was responsible for developing the permitting and financing strategy to bring the $1 billion Canadian Malartic mine into production. 

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Falco Resources Timeline

December 04 2014

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