Argonaut Gold (TSX: AR) has closed the sale of a 2% web smelter return royalty on its Magino challenge and surrounding land bundle in Ontario to Franco-Nevada (TSX: FNV) for US$52.5 million and a US$10 million fairness personal placement. Argonaut issued 34.69 million widespread shares to Franco-Nevada at a value of $0.3931 per share.
As well as, the corporate has closed its beforehand introduced US$250 million mortgage facility, and drawn down the primary tranche of US$80 million, which it has used to repay the excellent stability on its former revolving credit score facility. The power consists of a US$200 million time period mortgage and a US$50 million revolving credit score facility. The funds shall be used to develop and construct Magino.
“In finishing this financing, Argonaut expects to satisfy all future monetary obligations associated to Magino development and banking covenants whereas additionally sustaining a excessive degree of economic flexibility,” Larry Radford, Argonaut’s president and CEO, acknowledged in a information launch.
Radford changed the corporate’s founder and former president and CEO, Peter Dougherty. Dougherty stepped down in December 2021 and Radford was appointed to the publish earlier this 12 months in March.
The Magino mine property is a past-producing underground gold mine that Argonaut acquired in December 2012. It printed a feasibility research on an open-pit mining situation in December 2017.
The 100%-owned challenge is 40 km northeast of the city of Wawa, about 14 km southeast of the city of Dubreuilville, and fewer than one km from Alamos Gold’s (TSX: AGI; NYSE: AGI) Island gold mine.
Magino has confirmed and possible reserves of 58.9 million tonnes grading 1.13 grams gold per tonne for two.14 million oz. of contained gold. Measured and indicated sources, inclusive of reserves, stand at 144 million tonnes grading 0.91 gram gold for 4.19 million gold ounces.
As a part of its mortgage facility, Argonaut has hedged 25,000 oz. gold per quarter for the six quarters beginning within the third quarter of 2023 at a gold value of US$1,860 per ounce and 15,000 gold ounces per quarter for the ten quarters beginning within the first quarter of 2025 on the similar gold value. As well as, it has hedged 10,000 gold ounces per quarter for the ten quarters beginning within the first quarter of 2025 at a gold value of US$1,763 per ounce.
At presstime in Toronto Argonaut was buying and selling at 39¢ per share inside a 52-week vary of 36¢ and $4.09. the corporate has about 299 million widespread shares excellent for a market cap of roughly $298.3 million.