African Queen to raise $1.98 mln to fund drilling at Noyem gold project

Mineral explorer African Queen Mines (CVE:AQ) said Tuesday it plans to raise $1.98 million through a non-brokered private financing, as the company seeks to fund drilling at its Noyem gold project, West Africa. 

The Vancouver-based miner said it will 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.

Each unit consists of one common share and one-half of one purchase warrant of African Queen. Each whole warrant gives the holder a right to buy one extra share for 37 cents each for two years following the closing date.

A finder’s fee of seven percent of the offerings gross proceeds might be paid. The financing is slated to close in March and may include one or more tranches.

The securities issued have a four month hold period, while the private placement is subject to Toronto Stock Venture Exchange approval.

African Queen said it will use funds from the offering to finance a drill program at its Odundu property southwest in Kenya’s Rongo gold fields, property acquisitions and working capital.

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 in Ghana. 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.

The company’s share price traded at 21.5 cents apiece on Toronto’s junior stock exchange on Tuesday morning.