Corvus Gold (TSE:KOR) (OTCQX:CORVF) Thursday announced the closing of its non-brokered private placement financing for over $5.5 million, which will fund work at its North Bullfrog project in Nevada.
The company sold 8.25 million common shares at a price of 67 cents
for total proceeds of $5.528 million, with over 50 percent of the
placement taken up by management and insiders, with CEO Jeff Pontius
purchasing one million shares.
Corvus noted that in addition to management, other key participants in the financing include AngloGold Ashanti (NYSE:AU), Tocqueville Asset Management, Haywood Securities chairman John Tognetti and Apogee Global Advisors.
"The closing of this strategic financing and the support we have
received from our key existing investors has now positioned the company
to rapidly advance the North Bullfrog project to production," said
"Our recent drill success outside the current in-pit resource shows the potential for significant expansion of the deposits."
As the company stated in mid-April when it announced the private
placement, no new insiders will be created from the offering, nor will
there be any change of control. Finder's fees will also not be paid in
connection with the offering.
Corvus said that the new funds will be used to rapidly advance its North Bullfrog project toward production.
In late February, the company unveiled an independently prepared preliminary economic assessment (PEA) for the Nevada project.
The PEA produced an economic analysis for a conceptual, low capex,
heap leach project that generates average annual gold production of
57,700 ounces over 12.8 years, indicating a pre-tax, pre-royalty net
present value of $118.3 million and an internal rate of return of 28.8
percent at a $1,300 per ounce gold price and a five percent discount
a resource exploration company, focused in Nevada, Alaska and Quebec,
said that the PEA also shows the project has a considerable leverage to
gold price, with a pre-tax, pre-royalty net present value of $338
million and an internal rate of return of a whopping 70 percent at a
$1,700 per ounce gold price.
Total initial capital expenditure was estimated at $68.8 million with
a 2.6-year payback period for the project, which has a large in-pit
resource of 1.1 million ounces contained and 747,000 ounces of
Corvus controls 100 percent of the asset, which covers approximately
43 square kilometres in southern Nevada, just north of the historic
Bullfrog gold mine formerly operated by Barrick Gold (TSE:ABX)(NYSE:ABX).
The property package is made up of a number of private mineral leases
of patented federal mining claims and 161 federal unpatented mining
claims. The project has "excellent infrastructure", the company said,
being adjacent to a major highway and power corridor.
North Bullfrog currently includes numerous prospective gold targets
with four - Mayflower, Sierra Blanca, Jolly Jane and Connection -
containing an NI 43-101 compliant estimated indicated resource of 24
million tonnes at an average grade of 0.29 grams per tonne (g/t) gold
for 224,400 ounces of gold.
These same four targets hold an additional inferred resource of 468
million tonnes at 0.19 g/t gold for 2,835,000 ounces of gold (both at a
0.1 g/t cut-off), with appreciable silver credits.
Total cash operating costs were projected at $815 per ounce gold,
with an average of $673 per ounce gold over the first three years.
The company sees potential for significant resource expansion with an
ongoing drill program, as highlighted with recent success in a 400
metre step out hole that returned 52 metres of 0.8 g/t gold in early
In late March, the company also reported that it hit the Yellow
Jacket higher grade feeder zone at the project, from initial drilling
results in the first three holes of a phase one feeder zone exploration
The Yellow Jacket target is one of several in the North Bullfrog District that the company will be exploring in 2012.
These initial higher grade intervals are from holes about 400 metres
to the northeast of the proposed Sierra Blanca pit and resource, along
320 metres of strike and suggest continuity along the north-south
trending zone, open in all directions, the company noted at the time.
Highlights from diamond drilling at Yellow Jacket included 11.4
metres at 4.0 grams per tonne (g/t) of gold and 6.97 g/t silver in hole
NB-12-126 and 13.5 metres of 2.2 g/t gold in hole NB-12-127.
Corvus said in March it would follow up on these results in a phase
two program, following the completion of its ongoing large diameter core