VANCOUVER, Sept. 5, 2019 /CNW/ -
Freegold Ventures Limited (Freegold) (FVL:
TSX) is pleased to announce it has completed a
non-brokered private placement of units ("Units"), priced at
$0.0625 per Unit for total proceeds
of $1,968,269. Each Unit consists of
one common share (a "Share") and one half a common share purchase
warrant (a "Warrant"). Each whole Warrant will entitle the holder
to acquire an additional Share at a price of $0.081 per Share for a period of 36 months from
the date of closing.
Mr. Eric Sprott, through 2176423
Ontario Ltd., a corporation that is beneficially owned by him,
acquired 31,044,304 Units under the offering for a total
consideration of $1,940,269.
Following the completion of the private placement, Mr. Sprott's
holdings represent 14% of the issued and outstanding common shares
of the Company, on a non-diluted basis, and 19.7% on a partially
diluted basis, assuming the exercise of the Warrants acquired by
him. Mr. Sprott did not beneficially own any securities in the
Company prior to this investment. The Company understands that Mr.
Sprott acquired the Units for investment purposes and with a
long-term view of the investment.
The use of proceeds will be primarily directed toward Freegold's
Golden Summit Project near Fairbanks,
Alaska and general working capital. A Preliminary Economic
Assessment ("PEA") was completed on Golden Summit in January 2016, which provided a first look at a
potential development scenario. The PEA envisioned a 24-year
two-phase oxide and sulphide operation. The PEA requires both the
oxide and the sulphide material to be developed in order to return
an after tax IRR (internal rate of return) of 19.6% IRR and a NPV
(net present value) of US$188 Million
(5% discount rate) over a 24 year life of mine using a US
$1,300 gold price.
Additional desktop work by Freegold during 2019 has demonstrated
the potential for higher-grade mineralization extending west from
the old Cleary Hill Mine workings in
a previously undrilled area. As the district's highest grade
historical underground mine Cleary
Hill produced 281,000 ounces at an average grade of 1.3 oz.
per/t before production ceased in 1942. The potential for
higher grade could potentially increase the overall resource
grade. The 2019 drill program will test this revised
interpretation.
Since the PEA was completed a further 27 holes were drilled
in an area to the north of the current resource area. The results
of the 2017 program demonstrated the potential for expansion of the
current oxide resource at Golden Summit to the north with majority
of the holes returning average grades above the internal cut-off
used in the PEA.
Shorty Creek
Drilling is currently underway on the Shorty Creek Property. The
US $2.3 million 2019 program is fully
funded under the agreement with a wholly owned subsidiary of
South32 Limited (South32) whereby South32 has the option to earn a
70% interest in the Shorty Creek property. To maintain the
option in good standing South32 must contribute minimum exploration
funding of US$10 million over a
4-year option period with minimum exploration expenditures of
US$2million in Years 1 and 2 and
US$3 million in Years 3 and 4 for an
aggregate of US$10 million.
South32 may exercise its option to subscribe for 70% of the
shares of a newly formed project company by committing US$30 million to the newly formed company, less
the amount of exploration expenditure contributed by South32 during
the option period following the completion of each annual program.
Freegold shall act at as the Operator during the option
period.
Paradigm Capital acted as the sole financial advisor to the
Company in relation to the aforementioned financing.
Mr. Sprott acquired the Common Shares for investment
purposes. A copy of 2176423 Ontario Ltd.'s early warning
report will appear on the Company's profile on SEDAR and may also
be obtained by calling (416) 362-7172 (200 Bay Street, Suite 2600,
Royal Bank Plaza, South Tower, Toronto,
Ontario M5J 2J1).
The Qualified Person for this release is Alvin Jackson, P.Geo – Vice President
Exploration and Development for the Company who has reviewed and
approved the scientific and technical information contained in this
press release.
The information contained in this press release with respect to
the PEA is derived from a technical report entitled "NI-43-101
Technical Report, Golden Summit Project, Preliminary Economic
Assessment, Fairbanks North Star Borough, Alaska, USA" dated effective January 20, 2016 and amended and restated
May 11, 2016 prepared by Tetra Tech,
Inc. and Mark J. Abrams, C.P.G. and
Gary Giroux, P.Eng., M.A.Sc. of
Giroux Consultants Ltd., which has been filed under the Company's
profile on SEDAR. The PEA is preliminary in nature, it
includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves, and there is no certainty that the PEA will be
realized.
About Freegold Ventures Limited
Freegold is a TSX listed company focused on exploration in Alaska and holds through
leases
the Golden Summit Gold Project, near Fairbanks as well the Shorty Creek Copper –Gold Project near
Livengood.
Some statements in this news release contain forward-looking
information, including without limitation statements as to planned
expenditures and exploration programs. These statements address
future events and conditions and, as such, involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the statements. Such factors include
without limitation the completion of planned expenditures, the
ability to complete exploration programs on schedule and the
success of exploration program.
SOURCE Freegold Ventures Limited