Homestake closes first tranche of equity funding, to shortly start exploration at flagship project

Canadian exploration company Homestake Resource (CVE:HSR) announced Wednesday that it has closed the first tranche of its non-brokered private placement for gross proceeds of just over $1.0 million.
The first tranche of the total private placement of 10 million common flow-through shares and 10 million units was closed after the company issued 2.7 million flow-through shares and 1.9 milllion non flow-through Units.
Each flow-through share is priced at 25 cents per share, and each non flow-through unit has a cost of 20 cents each.
Each unit is made up of one common share and one share purchase warrant, with each whole warrant entitling the purchase of another share at a price of 30 cents for a 36 month period.
Homestake expects to use the new funds to finance Canadian exploration expenses at the company's Homestake Ridge and Kinskuch projects in British Columbia, Canada in 2012 to 2013.
The company is currently in final preparations for the start of the 2012 exploration season at the Homestake Ridge project, with mobilization scheduled for the last week of July, and drilling expected to begin in early August, continuing into the Fall.
Drilling on the Homestake Ridge project in 2012 will outline the extent of mineralization discovered in 2011 at the South Reef deposit, which is located roughly 800 metres to the southwest of the Homestake Silver deposit.
The planned holes will offset three holes from the 2011 program that tested a 75 metre strike-length of the mineralized trend to depths of 260 metres, and intersected more than 30 grams per tonne (g/t) gold in each hole, including a 3.1 metre interval averaging 30.8 g/t gold and 3.3 g/t silver from drill hole HR11-232.
The company said drilling will target much of the 1.2 kilometre strike length of this newly identified, mineralized zone, which represents the third high-grade gold/silver deposit discovered in this district.
Mineralization remains open at depth and along the full strike-length of the target horizon, the company said, which is equal to the cumulative strike-length of the previously delineated Main Homestake and Homestake Silver deposits.
The Homestake Ridge project in northwestern British Columbia is being advanced as a potential high-grade underground mining operation with a current NI 43-101 compliant indicated resource, at a 3.0 g/t gold equivalent cut-off, of 191,000 ounces gold and 1.35 million ounces of silver. It also has an inferred resource of 530,000 ounces gold and 13.47 million ounces of silver.
Two deposits have been delineated to date, with a third, South Reef, discovered late in 2011.
Homestake also holds an option to acquire the 623-square-kilometre Kinskuch project located adjacent to, and to the southeast of the company’s Homestake Ridge project.
A defined resource at South Reef and possibly at Kinskuch, together with any new discoveries, will add to the NI 43-101 compliant resources at the two deposits already delineated at the Homestake Ridge property.