TORONTO (miningweekly.com) – Toronto-based North American Palladium (NAP) has agreed to buy the Vezza gold project in Quebec's Abitibi region from Agnico-Eagle Mines for C$10-million, the company said on Tuesday.

The price includes C$3,5-million in cash and C$6,5-million in shares.

The Vezza property contains an estimated 288 000 ounces of measured and indicated gold resources, and is located 80 km by road from NAP's Sleeping Giant gold mine.

"The acquisition of Vezza supports our strategy to increase gold production by leveraging our underutilised Sleeping Giant mill,"said CEO Bill Biggar.

"With Vezza, we now have a sufficient number of projects in our pipeline that, if developed, could significantly increase production in our gold division."

NAP restarted the Sleeping Giant mine last year, after acquiring Cadiscor Resources, which had acquired the asset from Iamgold.

Before that, the company's only mine was its Lac des Iles palladium operation in Ontario, which it shut down in late 2008 but has restarted this month, in response to significantly firmer palladium prices.

Meanwhile, NAP also announced on Tuesday that it will raise about C$75-million in cross-border bought deal financing.

A syndicate of underwriters co-led by Cormark Securities Inc. and Haywood Securities will buy 15-million units, each comprising one share and one-half of a common share purchase warrant – for C$5,00 apiece.

The underwriters will also have an overallotment option to buy another 2,25-million units.

The company plans to use the proceeds to fund the development of the Offset zone at the Lac des Iles mine, to fund other capital expenditures, for exploration and development expenditures, to fund working capital requirements, and for general corporate purposes, “which may potentially include future acquisitions”.

Shares in NAP slid 1,51% on Tuesday, to C$5,22 apiece by 15:59 in Toronto.

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