Fronteer raises $6m for exploration

Vancouver — Fronteer Development Group (FRG-T) intends to raise $6 million through a private-placement financing, with most of the proceeds earmarked for exploration in Labrador and Red Lake. The financing will be brokered by a syndicate of agents led by Pacific International Securities, and Pacific can, prior to closing, increase the size of the offering to $10 million.

Fronteer will issue up to 5.5 million units priced at $1.10 apiece. A unit consists of one share and half a warrant. Each whole warrant entitles the holder to buy one share for two years, at a price of $1.45 in the first year and $1.65 in the second.

The underwriters will be paid a cash commission of 7% of the gross proceeds raised plus warrants equivalent to 10% of number of units sold. Each broker warrant entitles the underwriter to acquire one share for $1.50 for one year after the closing date.

Once completed, Fronteer will have $9.3 million in its coffers and 26.8 million shares issued and outstanding. Fronteer has five exploration programs under way in Canada, and these are focused on gold and copper-gold-silver-uranium (Olympic Dam-style) deposits. The company is completing due diligence on Teck Cominco‘s (TEK-T) gold portfolio in Turkey.

In a recent deal with Teck Cominco’s Turkish subsidiary, Fronteer signed a letter-of-intent to acquire five epithermal gold properties in western Turkey. Fronteer has been granted 30 days to complete technical due diligence and enter into binding option agreements for each of the properties.

Says Fronteer President Mark O’Dea: “This new land package represents an unprecedented opportunity to increase our resource base. All the properties we’ve optioned have large bulk-tonnage-style footprints with potential for high-grade ounces.”

The Agi Dagi property is a large high-sulphidation epithermal system with a mineralized silica cap that measures 4 by 2 km. Teck Cominco drilled a grid of shallow vertical holes through a small part of this silica cap in the southwestern corner of the property and calculated an inferred resource of 11.3 million tonnes averaging 1.2 grams gold per tonne. Fronteer believes the project may host higher-grade feeder structures and is expandable along strike.

The Kirazli property represents a high-sulphidation epithermal system characterized by a silicification footprint that measures 2 by 1 km. Several high-grade intervals were intersected by a previous owner.

The remaining three properties, referred to collectively as Biga, represent earlier-stage prospects with large alteration and geochemical footprints. Fronteer will soon begin advancing these properties to the drill stage.

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