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Wednesday, 31 October 2012
Kootenay Silver wraps up final tranche of $8.25 mln financing
Kootenay Silver (CVE: KTN) says it has closed the final tranche of its $8.25 million brokered private placement financing.
It issued 1.0 million units at a price of $1.05 each, for gross proceeds of $1.05 million, completing the balance of the offering.
Each unit was made up of one common share and one half of one share purchase warrant. Every warrant is good for one additional share at a price of $1.30 for a period of two years from today's date.
In total, the company issued 7.86 million units in the offering, which was led by Dundee Securities.
The company said the new funds will be used to advance its Promontorio silver project in Mexico, as well as for the maintenance of other projects and general corporate purposes.
The news follows the unveiling of an updated resource estimate at Promontorio in August, which saw a near tripling of the resource size.
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."