GlobeStar eyes $5m for Maimon

GlobeStar Mining (GMI-V) has inked a deal with Canaccord Capital and Dundee Securities to raise $5 million for its advanced Cerro de Maimon copper-gold project in the Dominican Republic.

Under the deal, the brokerage houses will attempt to place 6.7 million units of Globestar at 75 apiece. A unit comprises a share and one warrant, exercisable at $1.30 for 18 months after closing, scheduled for Nov. 18.

Canaccord and Dundee also will be paid a cash commission equivalent to 7% of the gross proceeds raised and will be granted options equivalent to 10% of those sold. The options expire 18 months after the deal closes and are exclusive of 666,666 units that the pair can buy under an over-allotment clause.

All securities issued under the transaction will be subject to a 4-month hold period, and the deal is subject to due diligence and regulatory approvals.

A portion of the net proceeds will be used to fund a bankable feasibility study of Cerro de Maimon by consultants Pincock, Allen & Holt.

At last report, Cerro de Maimon hosted 4.7 million tonnes of measured and indicated sulphide resources grading 2.8% copper and 1.74% zinc, plus 35 grams silver and 0.96 gram gold per tonne. Its oxide cap has measured resources of 664,000 tonnes averaging 63.8 grams silver and 2.54 grams gold.

Globestar expects to develop an open-pit mine and mill by late 2004. The company also intends to explore some 50 km of strike length on the surrounding Maimon formation.

Globestar has a half-interest in the project; a private U.S.-based company holds the other half, subject to a 10% management fee to Globestar and a provision of $750,000 for project development. The original owner, Falcondo, an 85%-owned subsidiary of Falconbridge (FL-T), retains a 2% net smelter return royalty.

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