Financings top up juniors’ treasuries

Vancouver — With investor interest in gold and base metal stocks picking up, several juniors are adding much-needed funds to their coffers by issuing shares.

In an effort to speed up development of the Donlin Creek deposit in Alaska, NovaGold Resources (NRI-T) has tabled a $20-million private placement.

To raise the funds on a best-efforts basis, Salman Partners will act as the lead agent in a syndicate that includes BMO Nesbitt Burns and Griffths McBurney. The deal prices each Novagold unit at $3.50. One unit consists of one share and half a warrant. A full warrant entitles the holder to buy one additional share at $4.50 for 18 months. The financing is expected to close by mid-April.

A portion of the funds will be applied to prefeasibility and feasibility studies on the Donlin Creek deposit.

A new study by MRDI Canada suggests Donlin Creek can support an annual production rate of 1 million oz. with a capital investment of $602.1 million. The mine plan envisages an open-pit operation capable of extracting 20,000 tonnes per day of mineralized material in each of 14 years at an average stripping ratio of 5.9-to-1. Head grades and recovery rates would be higher in the first five years, resulting in just over 10 million oz. of production over the life of the mine. All operating and economic projections are based on near-surface resources totalling 166.4 million tonnes at 3.6 grams per tonne. The resource, in turn, is based on a cutoff grade of 2 grams and includes material in three categories: measured (3% of the total), indicated (41%) and inferred (56%).

NovaGold can earn a 70% stake in the project by spending US$10 million on exploration and development within 10 years.

An aggressive financing program over the past month has prompted Corriente Resources (CTQ-T) to seek shareholder approval for more than a 25% dilution of its stock.

The junior’s latest deal is a $1-million private placement with its copper exploration partner, BHP Billiton (BHP-N). Under the agreement, Corriente will issue 740,740 units priced at $1.35 each. A unit consists of one share, and one warrant allowing BHP Billiton to buy one share for $1.35 within two years.

This financing, together with a brokered $2.5-million private placement, marks more than a 25% dilution of Corriente’s stock over a 6-month period, as allowed by the Toronto Stock Exchange without shareholder approval. The junior will seek shareholder approval of the latest financing at its annual general meeting in mid-May.

Corriente has been exploring four known copper porphyry systems in southern Ecuador in partnership with with Lowell Mineral Exploration and BHP Billiton. Last year, Corriente joined forces with BHP Billiton to explore base metal projects all over the world, starting with the Mumbwa copper-gold project in Zambia.

Metallica Resources (MR-T) hopes to raise $7 million by selling Canaccord Capital 3.9 million units priced at $1.80 each. A unit comprises one share and half a warrant. A full warrant allows the holder to buy an additional share for $2.25 over one year. The deal is slated to close in mid-April.

Meanwhile, Noranda (NRD-T) has be advancing Metallica’s promising El Morro copper-gold project in Chile. Under the deal, the major can earn a 70% stake in the property by spending $10 million and paying $10 million by Sept. 1, 2005. In addition, Noranda must complete a bankable feasibility study on the project by Sept. 1, 2007.