Sage Gold (CVE:SGX) announced Wednesday that is has executed a $1.0 million principal amount convertible debt financing, and the first tranche of a private placement for $403,500.
Shares jumped over 11 percent on the back of the news to five cents in late morning trading.
mineral exploration and development company said that the debt
financing, through a non-binding term sheet with Waterton Global Value,
L.P., will be used for preproduction expenses to advance its Clavos gold
deposit in Timmins, Ontario.
The private placement was made through the sale of flow-through (FT) share units and common share units, said Sage.
company said the convertible debt and equity financing will be used for
the completion of the earn in of the 60 percent interest, a new NI
43-101 compliant resource study, a preliminary economic assessment, a
new closure plan and working capital at the Clavos deposit.
are very pleased to have concluded a Term Sheet with Waterton for the
pre-production costs on the Clavos project, especially in a difficult
financing environment," said Sage president and CEO Nigel Lees.
"We look forward to a mutually beneficial relationship as we work together with Waterton on the future production financing".
proposed convertible financing has a term of two years, will accrue
interest at an annual rate of 9.5 percent and is convertible at the
holder's option into common shares of Sage at a price of $0.072 per
The debt will be secured by Sage's 60 percent interest in the Clavos deposit, and all of the company's other assets.
Sage noted that the proposed debt is subject to a number of conditions, including the execution of definitive agreements.
whole warrant is exercisable to purchase one non-flow through common
share at a price of 10 cents per share for 18 months from the closing
date, said the company.
Pursuant to this financing Sage issued 900,000 common shares and 450,000 warrants.
The company has received conditional approval of the private placement from the TSX-Venture Exchange.
said it is in the final stage of completing a 60 percent earn in
interest in the Clavos property and has completed the $3 million dollar
expenditure requirement and is required to pay $40,000 in cash and issue
$40,000 worth of common shares and replace the $250,000 closure bond to
complete the earn in.
St Andrew Goldfields (TSE:SAS)
and Sage have been working towards completing a joint venture
agreement, which the company said will govern the operating and
financial relationship between the parties after the earn in.
Upon completion of the joint venture agreement, Sage will become the operator of the Clavos project.
The company said an updated NI43-101 compliant resource study is near completion for the Clavos deposit and will include
historical surface and underground drilling as well as Sage's drilling results.
is a mineral exploration and development company which has primary
interests in near-term production and exploration properties in Ontario.
Its main properties are the Clavos Gold deposit in Timmins and
the Lynx deposit and other exploration properties in the
Beardmore-Geraldton Gold Camp.
In February, the company said that
following the completion of the updated resource estimate, it will
undertake a scoping study, which it expects will provide it with the
data required to evaluate the feasibility of several development options
on the property.
These options include the potential for near
term cash flow related to the extraction of tonnage identified with the
existing Clavos deposit, the feasibility of developing the 960 zone with
one or two exploration drives, and the position of the Sediment zone,
in relation to the 960 zone.
The 960 zone is located 600 metres east of the existing Clavos underground workings.
Sage said it is possible that the Sediment zone could offer access to the 960 zone, reducing capital expenditures.
Also in February, the company announced the completion of 2,400 metres of drilling within the 960 zone.
The drilling targeted the potential down-dip extension of the zone, as well as tested the Sediment zone to the south of 960.