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Friday, 27 September 2013
Otis Gold to raise up to $300,000 for Idaho project
Otis Gold Corp. (CVE:OOO)(OTCQX:OGLDF) says it will raise up to $300,000 through a non-brokered private placement financing, with the new funds to be used to advance the company's Kilgore gold project in Idaho and for general working capital purposes.
The company will issue up to 6.0 million units at a price of 5 cents apiece, with unit to be made up of one common share and one share purchase warrant. Every warrant can be used to buy an additional share, at a price of 10 cents each for a period of 18 months from closing.
The financing is part of the Vancouver-based company's plan to withstand challenges sweeping across the junior mining landscape. "This funding will provide the necessary capital to continue permitting activities at Kilgore, and the small size will minimize dilution to existing shareholders," said CEO CraigLindsay in an interview with Proactive Investors today. “We have worked very hard to minimize our operating costs over the first 9 months of 2013, and will continue to maintain our low overheads.
"As well, unlike many juniors, we own a 100% interest in our core properties, and thus have no earn-in requirements on our mineral projects apart from annual claim maintenance costs. As a result, we have not had to rationalize our property ownership positions by dropping projects.”
Lindsay's confidence in the company is highlighted by the fact that the chief executive has been adding to his stake in Otis aggressively since the start of the year. In fact, since May of this year, Lindsay has purchased 1.555 million shares in the open market. His direct holdings amount to 4.2 per cent of the company, and he states “I will be continuing to add to my position in the company.”
In May, Otis filed its intention to build approximately 1,550 metres of roads into the North Target Area, which is next to the existing Kilgore Gold deposit, and in an area that recently returned "strong drilling results" such as 121.9 metres of 1.04 grams per tonne (g/t) gold. The Kilgore deposit in Idaho contains an NI 43-101 indicated resource of 520,000 gold ounces in 27.4 million tonnes at a grade of 0.59 grams per tonne (g/t) and an inferred resource of 300,000 ounces in 20.2 million tonnes at a grade of 0.46 g/t.
Otis Gold also earlier this year announced a partnership that allows Lateral Gold to earn up to a 100 per cent interest in the Oakley Gold project in Idaho, as a means to raise cash for Kilgore.
The proposed financing announced Friday still needs the approval of the TSX Venture Exchange.