TSX-V-listed West Red Lake Gold Mines has announced a $20-million private placement to raise funds to advance the development of a restart plan for the Madsen gold mine, in Ontario.
The company appointed Raymond James as sole bookrunner and lead agent, on behalf of a syndicate of agents, for a marketed best efforts private placement of units at $1 000 each.
Each unit will contain gold-linked notes in the aggregate principal amount of $1 000 and 710 common share purchases warrants. Each whole warrant will entitle the holder to purchase one common share at an exercise price of C$0.95 each for 60 months following the closing of the offering.
“The offering marks another key step in the financing process as we focus our efforts on the development of a derisked and robust restart plan for the Madsen gold mine, while minimising dilution to our shareholders,” said CEO Shane Williams.
Frank Giustra, who holds 11.07% of the outstanding common shares, has indicated his intent to participate in the offering by subscribing for 3 700 units representing $3.7-million in gross proceeds.
West Red Lake bought Madsen mine in June last year. Its former owner, Pure Gold Mining, placed the operation on care and maintenance in October 2022, after failing to secure additional funds to keep the mine operational. The company filed for creditor protection a couple of days later.