Kootenay Silver (CVE:KTN) said today that it has closed the first tranche of its brokered private placement financing announced earlier this month, raising $7.2 million so far - more than originally anticipated.
The company said it has received subscriptions for $8.25 million of units.
The first tranche consisted of 6.86 million units at a price of $1.05 each, for around $7.2 million in gross proceeds.
Kootenay expects the remainder of the offering, led by Dundee Securities, to close shortly, it said, and will provide updates accordingly.
Every unit is made up of one common share and one half of a share purchase warrant, with each whole warrant good for an additional share at a price of $1.30 for a period of two years from closing.
Earlier this month, the company said it planned to raise just $6.0 million for the advancement of its Promontorio project in Mexico, as it had agreed with Dundee Securities, on behalf of a syndicate, to offer up 5.72 million units at $1.05 each.
The news today follows the unveiling of an updated resource estimate at Promontorio in August, which saw a near tripling of the resource size.
The new funds from the offering will be used to advance the project, as well as maintain its other properties and for general corporate purposes.
In total, the updated measured and indicated mineral resource at Promontorio contains an estimated 61.679 million ounces of silver equivalent (AgEq), with another 14.469 million ounces of AgEq categorized as inferred.
The significant increase in resources was due to extensive additional drilling of over 37,900 metres to expand the previous resource, as well as define an entirely new area to the northeast of the previous resource.
Kootenay said over 22,000 samples were used in the modeled wireframes compared to just over 3,000 for the previous model.
The resource areas remain open in multiple directions with the next steps being the aggressive expansion of these resources through drilling, Kootenay said, and the advancement of geotechnical, engineering, groundwater and environmental studies for the project.
Last month, the company completed a sensitivity analysis of varying metal prices at 18, 24 and 36-month trailing averages.
“When you apply even the most conservative metal prices observed during the 18 to 36 month period, there is less than a 4 per cent variance in Promontorio’s measured and indicated resource,” Kootenay Silver president and CEO James McDonald said in early September.
“This is due to the impact of the high silver grades in the diatreme system, which is also exciting as it has a positive impact on the economic dynamics of the resource.”