A private placement will provide Crown Butte Resources (TSE) with $10.7 million for ongoing work at its New World gold-copper-silver project in Park Cty., Mont.
The company is 60%-owned by Hemlo Gold Mines (TSE), which agreed to buy 1.07 special warrants representing 60% of the issue. Some of the proceeds will be used to repay interim financing provided to Crown Butte by Hemlo Gold. The Miller Creek and Homestake deposits at New World together host 7.9 million tons grading 0.25 oz. gold (0.2 oz. cut) and 1.04 oz. silver per ton, plus 0.74% copper.
A proposed operating plan calls for underground mining and gravity-flotation processing. The plan reflects a decision to forgo open-pit mining and use of cyanide.
New World is in an environmentally sensitive alpine region near Yellowstone National Park. Crown Butte has received awards for protecting the environment of the property and intends to enhance areas that were surface-mined by previous operators.
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