Vancouver – Cypress Development (CYP-V, CYDVF-O) has lined up Goldcorp (G-T, GG-N) to take down a planned $2.6-million private placement.
The gold senior will subscribe for 4 million units at 65 apiece with each comprised of a common share and a warrant exercisable at $1.00 over the first year and $1.30 in the second.
The modest investment by Goldcorp will position it with about a 4.8% stake in the junior exploring the Broulan Reef project in the Red Lake area of northwestern Ontario.
Held 80% by Cypress and 20% by its sister company Skyharbour Resources (SYH-V, SYHBF-O), Broulan Reef is centrally located in the Red Lake gold camp and adjacent to and south of Gold Eagle Mines‘ (GEA-T, GEAFF-O) project that has seen a significant amount of drilling.
The Broulan Reef property is about 95% overlain by the waters of Red Lake’s Bruce Channel but is strategically positioned at the convergence of two gold trends (East Bay Deformation zone and the Mine Trend Deformation zone).
Last year’s drilling by joint venture partners Cypress and Skyharbour failed to turn up any economic grade intercepts but indicated structural components leading to additional target generation.
Goldcorp operates two mines in the gold camp, its Red Lake complex and its Campbell complex that produced a combined 825,200 oz. of gold in 2005.
On news of the Goldcorp investment almost 4.5 million shares of Cypress changed hands but it closed down a penny at 61 per share. Stock of the Red Lake gold junior has a 52-week trading range of 15.5-to-71.
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