Pure Gold Mining Inc (CVE:PGM) (LON:PUR) said it has enough funds to kick off exploration drilling at its Red Lake gold mine development project in Ontario, as it revealed it had raised C$12.3 million from an exercise of share purchase warrants.
The firm is currently building the mine - the highest-grade underground project in Canada.
"With approximately $150 million available in funding, and $86 million remaining on capital expenditure to complete our mine construction, the company is in a uniquely solid financial position to be able to concurrently fund an aggressive exploration program," Pure Gold said in a statement.
The exploration program is earmarked to begin on June 3 and will include drilling in a bid to expand resources in areas targeted for early production, as well as expanding high-grade discoveries at surface and at depth across the 47 square kilometre asset.
"Our mine has all the attributes of a company maker – location, grade, size, and transformative growth potential," Darin Labrenz, Pure Gold's chief executive said.
"The opportunity for value creation is tremendous, with near term cash flow delivered in a rising gold market, and a strong organic growth platform to build out our vision of a long-life growth company. Having only scratched the surface across our 7+ kilometre long high-grade gold system, we are taking measures to expedite our growth plan."
The C$12.3 million was raised from the exercise of more than 14.4 million share purchase warrants with a strike price of C$0.85, representing all the warrants which would have otherwise expired on May 24 this year, the company noted.
Coupled with the closing of the recently announced placing, PureGold will have around C$101 million in cash, along with US$35 million available in an undrawn credit facility, it added.
Major miner AngloGold Ashanti maintained its shareholdings in the company, at around 15%, through the exercise of warrants, while well-known resource investor Eric Sprott increased support, now holds around 12% of Pure Gold shares.
Labrenz thanked both for recognizing the value of the group's near term gold production and the value creation that comes from ongoing discoveries and resource growth.
Shares in London added 6.8% to 76.38p.
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