TORONTO (miningweekly.com) – Toronto-based North American Palladium (NAP) will raise C$50-million in a bought deal offering of shares and warrants, plus another C$15-million in a flow-through share offering, the firm said on Tuesday.

NAP has signed an agreement with a syndicate of underwriters let by Thomas Weisel Partners Canada, which will buy 16-million units on a bought-deal basis, for gross proceeds of about C$50,4-million.

The units will be priced at C$3,15 apiece, and will each comprise one common share and one-half of a share-purchase warrant.

NAP said the offering was increased from a previously-announced 11,2-million units, for C$35-million.

The underwriters have also been given an overallotment option on another 2,4-million units.

The cash raised in the offering will be used for exploration and development at NAP's halted Lac des Iles palladium mine and its Sleeping Giant gold project, to fund capital spending and working capital requirements for a potential future restart at Lac des Iles, and for general corporate purposes, which could include acquisitions.

Separately, NAP said it will sell four-million flow-through shares in a bought-deal offering, at C$3,75 apiece.

The flow-through offering will raise a total of C$15-million, and the company will use the proceeds for exploration.

Canada's flow-through system allows junior companies to 'flow through' their exploration expenses  in Canada to Canadian investors, and the investors can in turn use these expenses to offset their income and reduce their income taxes.

Earlier this month, NAP withdrew from a best-efforts private placement of up to $50-million, after the final terms proposed by its agent were “not satisfactory”.

The firm initially said on August 17 it planned to sell up to $50-million in 7% secured convertible notes.

The Lac des Iles mine, in Ontario, has been on care-and-maintenance since October, after platinum-group metals prices dropped. NAP has said it will restart the operation when prices strengthen and is continuing exploration at the asset in the meantime, and working on a plan to expand the underground operations.

The company is also preparing to restart the Sleeping Giant operation, in Quebec, which it acquired when it bought Cadiscor Resources earlier this year.

Sleeping Giant is scheduled to start production in the fourth quarter of this year.

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