Spanish Mountain Gold to raise up to $3 mln for exploration

Spanish Mountain Gold (CVE:SPA) is to raise up to $3 million through a proposed private placement financing to spend on exploration at its property in British Columbia. 

In a statement Thursday, the company said it hired Secutor Capital Management to act as lead agent for the placement, which will see the issuance of up to $1.5 million common share units, and of up to $1.5 million flow-through units. 

Each common share unit will be sold at a price of 10 cents apiece, and will be made up of one common share and one share purchase warrant. Each flow through unit, meanwhile, will be sold at a price of 12 cents each, and will consist of one common share, which will be designated as a flow-through share, and one half of a warrant. 

Every warrant will allow the holder to buy one additional common share at a price of 15 cents apiece for a period of two years following the closing of the offering. 

The agent also has an over-allotment option, meaning there is the option to purchase an additional 15 per cent of the total number of units sold. 

The financing, from which flow through proceeds will be used to incur exploration expenditures, is expected to close sometime around September 18, subject to some conditions. 

The Vancouver-based exploration-stage company is developing its flagship Spanish Mountain gold project in southern central British  Columbia. It has no debt and owns 100 per cent of all four gold properties located in British Columbia.  Last month, it announced that it embarked on a 10,000 metre drill program aimed at potentially improving grades within a test block area of the main pit at Spanish Mountain. 

 “Considering the current market conditions management believes this program provides the best opportunity to potentially add significant value at minimal cost to the shareholders," Colin Clancy, head of Corporate Communications at the company, toldProactiveinvestors in an interview at the time. 

Shares of the gold explorer were up by one penny on Friday, at 11.5 cents, up almost 10 per cent on previous close.