Probe Metals raises $20.8M for Canadian exploration

Probe Metals (TSXV: PRB; US-OTC: PROBF) is raising $20.8 million for exploration on its Canadian gold projects by issuing approximately 6.7 million flow-though shares at $3.10 each. The shares will be purchased by a syndicate of underwriters led by Canaccord Genuity.

Probe is planning a 162,000-metre drill program this year at its flagship Val-d’Or East project in Quebec.

Each flow-through unit will consist of one common share and half a common share purchase warrant. Each full warrant entitles the holder to acquire one common share of Probe at a price of $2.40 per share for a period of 24-months from closing. Closing is expected on or about March 8.

Probe’s 100%-owned Val-d’Or East gold project is about 25 km from the town of Val d’Or, Quebec. A preliminary economic assessment was prepared last year, estimating the presence of 1.8 million oz. of gold in measured and indicated resources and 2.3 million oz. in inferred resources.

Using a gold price of US$1,500 per oz., the Val-d’Or East project has an after-tax net present value of $598 million (using a 5% discount rate) and an internal rate of return of 32.8%. After an initial capex of $353 million, the payback is expected in 2.7 years. Annual gold production over the 12.5-year life of the project would be 207,000 oz. at an all-in sustaining cost of US$965 per ounce.

Probe has outlined a leaching operation with both open pit and underground ore sources. The initial capacity would be 10,000 tonnes of mineralized material per day through a crushing and ore sorting circuit with expansion to occur  in the fourth year of operation with the addition of more crushing and ore sorting capacity.

If plans go forward without unnecessary delay, permitting approval and construction financing could be obtained in 2026, paving the way to development.

The Val-d’Or East project hosts measured and indicated resources (both pit and underground) of 29.8 million tonnes averaging 1.81 grams gold per tonne for 1.7 million contained oz. and an inferred resource of 29.9 million at 2.11 grams gold per tonne for almost 2 million ounces.

An additional inferred resource that covers the Lapaska, Senore and Sleepy zones contains 2.7 million tonnes grading 3.19 grams gold per tonne for 273,000 contained ounces.