Hemlo’s Freewest stake jumps to 27%

Toronto-based Hemlo Gold Mines (TSE) will increase to 27% its interest in Freewest Resources (TSE) by acquiring one million shares of the junior under a financing agreement signed in 1989.

The common shares will be acquired on a flow-through basis at $2.31 each to help finance Freewest’s 33.9% interest in the Holloway gold project in northeastern Ontario.

Freewest jumped to $2.85 from $2.40 recently in reaction to a sharp increase in the gold price.

Hemlo, which will hold 3.33 million Freewest shares after the transaction, may subscribe for additional shares, depending on market conditions and other factors.

The Holloway shaft was bottomed at 440 metres (1,443 ft.) in March and drifting and underground drilling are under way. Teddy Bear Valley Mines (CDN) holds 15.3%.