Strongbow announces C$8.5m royalty sale and equity financing for UK project
JOHANNESBURG (miningweekly.com) – Canadian project developer Strongbow Exploration has announced an C$8.5-million royalty sale and equity financing agreement to fund the water treatment plant at its South Crofty tin project in Cornwall, in the UK.
Strongbow has agreed to sell a 1.5% net smelter returns royalty to Osisko Gold on all production from the South Crofty tin project for $7.17-million. The company will also complete a nonbrokered private placement of $0.14 a share for gross proceeds of up to $2-million. Osisko intends to purchase 9.5-million shares at $1.33-million.
The South Crofty mine is currently flooded, but recent water treatment trials have shown that the water can be successfully treated to an adequate quality to permit safe dewatering of the mine.
The water treatment plant will be designed to treat 25 000 m3/d of mine water and enable dewatering of the mine workings in the South Crofty project area.
A February preliminary economic assessment (PEA) on the South Crofty project has calculated a net present value, at a 5% discount rate, of $130.5-million, and an internal rate of return of 23.4%, at assumed metal prices of $10/lb tin, $2.65/lb copper and $0.90/lb zinc. The mineralised material the PEA overviews is 2.58-million tonnes containing 88-million pounds of tin equivalent, at an average grade of 1.55%.
Completion of the royalty sale and the private placement is subject to certain conditions, including the approval of the TSX-V.
Osisko beneficially owns, directly or indirectly, about 23.4% of the outstanding common shares of Strongbow.
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