GoldON Resources (CVE:GLD) says it will raise $0.5 million through a non-brokered private placement financing, with its largest shareholder - Iamgold (TSE:IMG) (NYSE:IAG) - already committing to a hefty chunk of the offering.
The company, which recently started trading under a new symbol after changing its name from Newcastle Minerals, has negotiated a placement of 3.5 million non-flow-through units at a price of 10 cents each, and 1.5 million flow through shares at the same price.
It said that Iamgold has agreed to participate in the offering for up to 1.5 million non-flow-through units, subject to the company's holding not surpassing 19.9 percent of GoldON.
Each non-flow-through unit is made up of one non-flow through share and one warrant, with each warrant entitling the holder to buy an additional non-flow through common share at a price of 15 cents during the first year following the closing, and 20 cents during the second year.
The new funds will be used for exploration on the company's Swayze gold property, and general working capital.
The company last week said it started its 2013 exploration on its Swayze gold property that adjoins Iamgold's multi-million ounce Cote gold project in Ontario.
The Canadian explorer is set for a busy year ahead after a planned reinvention of sorts, which has included a restructuring and rebranding of the company in a bid to raise funds for its projects in two of the prolific mining belts of Ontario. The financing announced today is part of the restructuring plan sealed earlier this year.
Along with the financing, the plan included a share consolidation, a name change, and a trading symbol change – all part of its “clean up” strategy to better position the company for long-term growth.
The company’s focus is on two gold projects with large scale potential that are strategically located in the Swayze and Pickle Lake gold mining belts of Ontario.
The 15,500 hectare Pickle Lake gold project is within the Pickle Lake greenstone belt in northwestern Ontario, where more than 2.2 million ounces of gold have been produced. The property ties onto both ends of PC Gold’s Pickle Crow mine trend and the past-producing Pickle Crow mine, which produced 1.45 million ounces of gold from 1935 to 1966.