TORONTO (miningweekly.com) – Nevada-focused project developer Pershing Gold has closed a $6-million financing deal to move the Relief Canyon gold project further up the value curve.

Under the private placement, Donald Smith Value Fund bought 1.85-million units, at a price of $3.25 apiece, for net proceeds to the company of about $6-million.

Each unit comprised one Pershing common share and a 30-month warrant to acquire 0.5 of a Pershing share at a strike price of $4.35.

BMO Capital Markets is acting as an adviser to the company.

Pershing said it expected to use the net proceeds for advancing the Relief Canyon project and for general corporate purposes.

The New York-headquartered Donald Smith Value Fund had notable investments in the mining space, including Kinross Gold, Coeur Mining and Alamos Gold.

Relief Canyon included three openpit mines and a state-of-the-art, fully permitted and constructed heap-leach processing facility. Pershing was currently permitted to resume mining at Relief Canyon under the existing plan of operations.

Pershing had identified a National Instrument 43-101-compliant gold resource at Relief Canyon of 739 000 oz measured and indicated and 70 000 oz inferred. This represented a more than five-fold increase in the resource estimate at Relief Canyon since Pershing was formed in 2011.

Relief Canyon would see an initial capital expenditure outlay of about $11-million, cash costs in the range of $695/oz to R745/oz gold, and all-in sustaining costs in the range of $725/oz to $775/oz gold, on a constrained in-pit resource, over an initial estimated mine life of six years.

Pershing expected to publish a revised preliminary economic assessment in the first half of 2016, which could further enhance the economic prospects and the outlook of the company, as it worked on an updated resource estimate, which would include about 29 000 m of development drilling.