TSX-V-listed Wolfden Resources’ share price shot up 5% to C$0.18 apiece, following its announcement that Kinross Gold would take a 9.7% stake in the junior miner.
The subscription agreement entails a nonbrokered private placement of about 12.5-million common shares of Wolfden at a price of C$0.20 apiece for gross proceeds of C$2.5-million.
The majority of proceeds from the offering will be used to explore the company’s wholly-owned Pickett Mountain high-grade polymetallic deposit, in Maine, US.
Wolfden anticipated the transaction to be complete on, or around, March 29, but no later than May 1, subject to TSX-V approval.
As part of Kinross’ subscription, it has agreed to form an exploration committee with Wolfden.
Wolfden has been working on metallurgical studies, which includes follow-up of the footwall zone, which it discovered earlier this year, in a drill hole that intersected 4.1 m of 38.2% zinc equivalent, including 612 g/t gold and 0.5 g/t gold. One of the deeper holes hit 19.5 m of 33.1% zinc equivalent, including 269 g/t gold and 1.1 g/t gold.
Pickett Mountain is home to a zinc and other base and precious metals-rich volganogenic massive sulphide deposit. The mineral resource currently stands at 2.05-million tonnes grading 19.3% zinc equivalent of indicated resources.
Wolfden will continue definition drilling and technical studies to demonstrate the economic potential for an underground mine.