Sage Gold (CVE:SGX) says it has closed the first tranche of a C$1.5 million non-brokered private placement financing, raising a total of $713,587 so far.
In the first tranche, the company sold 1.15 million flow-through units at a price of 7.5 cents and 10.46 million common share units at a price of 6 cents.
Each flow through unit is made up of one flow through common share, and one half of one share purchase warrant. Every warrant allows the purchase of another common share at a price of 12 cents for a period of two years.
Meanwhile, each common share unit is made up of one common share and one half of one share purchase warrant. Every full warrant allows the holder to buy another common share at a price of 10 cents for a period of two years.
The new funds will be used to finance the company's 60 per cent share of the exploration and development costs for the Clavos property in Timmins, Ontario and for general corporate purposes.
Sage holds 60 per cent of the Clavos property under a joint venture with St. Andrew Goldfields (TSE:SAS), which holds the remaining 40 per cent.
Earlier this week, the company secured the necessary permit and completed the change of ownership to reopen the Clavos mine site in Timmins, for exploration, development and eventual production.
"We are very pleased to have received the final permits to allow us to dewater the Clavos mine, continue advanced exploration and development and commence production of 700 tonnes per day," said president and CEO Nigel Lees in a statement today.
"The closing of the first tranche of financing will allow us to continue to fund the pre-production expenses."
Indeed, Sage Gold has just come off more than doubling the gold ounces at its Clavos deposit, and is now set for further expansion at the project – which it hopes to advance to production.
Just weeks ago, the company announced that the new NI 43-101 compliant resource estimated indicated resources of 1.26 million tonnes at 4.81 grams per tonne (g/t) gold, for a total of 194,600 ounces of gold.
This is in addition to the inferred mineral resources of 796,000 tonnes at 4.7 g/t gold, representing a total of 120,000 ounces.
The growth in gold ounces reflects additional underground and surface drilling within the last two years, and the addition of the 960 zone and Sediment deposits at the property.
Though some surface drilling is planned to expand the resource, Sage’s CEO Lees recently told Proactive Investors that drilling at the site is more effective from underground. The company plans to tighten the spacing of the holes through definition drilling, with the aim to upgrade resources to the reserve category.
“All we have to do is go back down the ramp and dewater – this is planned for the end of the first quarter next year. A large part of our planned budget will go toward definition drilling to convert resources to reserves, and our capex estimates are very modest,” he affirmed.
Separately, the company also said Wednesday that the TSX Venture Exchange has accepted for filing its proposal to issue 333,442 common shares to settle debt with various creditors.
Aside from Clavos, Sage holds the polymetallic copper-silver-gold Lynx deposit in the Beardmore-Geraldton gold camp, which also has an NI 43-101 resource.
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