Mountain Lake to raise $2 million in private financing from Sprott Asset Management

Junior explorer Mountain Lake Resources (CVE:MOA) reported on Wednesday it will raise $2 million in a private placement with Sprott Asset Management to fund its gold projects in Newfoundland and for general working capital purposes.

The company intends to sell 3.1 million shares at 65 cents per unit. Each unit comprises of one common share and one-half of a transferable share purchase warrant, with each warrant giving the holder the right to buy one extra common share of the company for 80 cents a share for a period of two years.

Shares of the Halifax, Nova Scotia-based company rose 1.56% to $65 cents per share Wednesday afternoon on the Toronto Stock market.

The company also said that the deal is subject to Toronto Stock Exchange approval and that all the securities issued during this offering have a hold period that expires four months after the closing date. 

Mountain Lake CEO Gary Woods said: "The investment backing of Sprott Asset Management and other investors has enabled Mountain Lake to maintain a path to growth over the years, and we are pleased to receive another round of financing from a group of Sprott managed funds in the midst of this current period of market volatility."

The company explores viable mineral properties in Newfoundland and holds a 50% stake in the Valentine Lake gold property, where drilling is in progress, in a joint venture with Marathon Gold (TSX:MOZ).