ERDENE Resource Development Corp has raised Can$1.5 million in an oversubscribed, non-brokered financing. The original proposed financing was to sell almost 7.143 million units for gross proceeds of up to $1 million but this was increased to more than 10.714 million units.
Drilling at Erdene’s Altan Nar Gold-Polymetallic Project in southwest Mongolia.
ERDENE Resource Development Corp has raised Can$1.5 million in an oversubscribed, non-brokered financing. The original proposed financing was to sell almost 7.143 million units for gross proceeds of up to $1 million but this was increased to more than 10.714 million units.
In early June the company announced that it had closed the first tranche of $1.15 million and expected to close the final tranche before mid-June. Net proceeds will be used to advance Erdene’s Altan Nar Gold-Polymetallic Project in southwest Mongolia and for general working capital. Altan Nar is a high-grade, near-surface deposit with mineralization extending over 5.6km.
The company’s current work plan for Altan Nar includes process test work, evaluations of the mining, engineering, transportation and marketing options, as well as exploration and development related drilling.
In April Erdene closed a non-brokered private placement financing with Teck Resources for gross proceeds of $392,857. In addition, Teck was issued shares on the exercise of warrants for gross proceeds of $107,143. Net proceeds from the exercise of the warrants will be used to retire a non-interest bearing loan owed to Teck.
These arrangements fulfilled Teck’s annual equity investment obligation as part of the strategic alliance between Erdene and Teck which provides Teck with earn-in exploration opportunities on new mineral licences generated by the company in Mongolia.
Pursuant to the alliance Teck has the option of making additional private placements in Erdene, priced at the then current market plus 10%, until Teck has invested at least $3 million or acquired through those subscriptions 19.9% of the outstanding shares of Erdene, whichever occurs first. A minimum of $500,000 is to be subscribed on each anniversary date of the closing of the initial tranche.
Teck has participated in four Erdene private placements since April 2013 for a total of $2 million, bringing Teck’s holdings of Erdene’s outstanding common shares to 15.1%. Once Erdene has spent 85% of the proceeds from the Teck placements on the initial program, Teck has the option to acquire up to a 75% interest in designated projects through a two-stage option process.
Earlier this year Erdene received an initial resource estimate for the Discovery Zone and Union North targets, two of 18 identified at Altan Nar. There is an indicated resource of 147,000 ounces gold equivalent averaging 2.5 grams/tonne gold equivalent and an inferred resource of 102,000 ounces gold equivalent averaging 2.1 grams/tonne, at a 1.0 grams/tonne gold equivalent cut-off grade within 1.8 million tonnes indicated and 1.5 million tonnes inferred.
ERDENE