Soaring exploration junior Banks Island Gold (
TSX:V.BOZ,
Stock Forum) has announced a brokered private placement to sell up to 2.5m flow-through shares at $0.80 per share and 2.6m common shares at $0.75 per share, in an effort to
raise $4 million in financing.
Secutor Capital Management Corporation has been engaged to execute the offer.
The company reported successful gold intersects of 6.3gpt gold over 52.5m at their Red Mountain project two weeks ago, including 32.0gpt over 7.2m, which saw their share price rocket over 30% to a near 52-week high of $0.83.
The stock sits at $0.76 today with a market cap of $29.5 million and 38m shares outstanding.
The company is seeking to bring the Red Mountain project to production as soon as possible, with a start date of summer 2014 being floated.
Previous operators have spent over $40 million on the property prior to it being acquired from Imperial Metals (
TSX:T.III,
Stock Forum) . Underground equipment and a production sized decline are on-site.
Banks Island will ship concentrate from its Yellow Giant property by year end, according to President, and CEO Ben Mossman.
“The focus in my career has been on underground mining,”
Mossman told Stockhouse last week. “In the recent past the market has been overall focused on large scale, low grade, open-pit style mining. This has created very attractive opportunities for acquiring high grade deposits that must be mined from underground. In these cases we are acquiring assets for fractions of what it cost to discovery and explore them.”
Mossman indicated that the main challenge Banks Island faced was “access to capital,” hence the private placement. “As we establish a profitable business we will be entering a new phase in the company’s growth,” he says.
“Our company is going into production very quickly and is, in our opinion, undervalued in the market,” he added. “We have a competitive edge in this market and expect to gain recognition of this as we continue to deliver results to our shareholders.”