African Queen Mines closes C$1.7 mln first tranche of non-brokered financing

African Queen Mines (CVE:AQ) said late Friday that it has closed a C$1.7 million first tranche of its previously announced $1.98 million non-brokered private placement financing.

Under the terms of the offering, the company issued 7.79 million units at 22 Canadian cents each.

Each unit consists of one common share and one-half of a share purchase warrant, with each whole warrant entitling the holder to purchase one additional common share of the company at an exercise price of 37 cents, until March 16, 2014.

In connection with the financing, the company paid cash finders’ fees of C$58,297, representing 3.40 percent of the total proceeds of the deal.

“We are very gratified with the strong investor response to our financing,which has resulted in our closing the first tranche with approximately $1.7 Million in a short period of only two weeks since we commenced the offering," said CEO Irwin Olian.

"Considering the highly volatile market environment facing mining shares, we are very thankful to the 42 investors who so readily participated in the offering. 

"This first tranche will provide the company with the necessary funding to cover our budgeted drill programs in Ghana and Kenya, as well as working capital."

Olian added that the second tranche is expected to close before the end of the month.

In early March, the mineral explorer said it plans to raise $1.98 million through a non-brokered private financing. The Vancouver-based miner said it would offer nine million units priced at 22 cents a unit. The company also noted it may boost the offering by 20 percent to 10.8 million units.

African Queen said it will use funds from the offering to finance development at its Odundu property in Kenya’s Rongo gold fields, and for its Noyem-Nyanfoman property in Ghana.

The company, under a joint venture deal with Akan Exploration, can earn a 75 percent stake in the Noyem-Nyanfoman gold project by funding prescribed stages from exploration through feasibility. African Queen is the operator of the project.

Last September, the company arrived at a settlement for an additional 12 mining claims at its Noyem-Nyanfoman gold project. The 12 claims cover about 300 acres on the Noyem A reef in Ghana's Ashanti Belt. This followed settlements in July 2011 for an additional seven of the 26 mining claims that conflicted with its prospecting license for the gold property.