Mustang raises $6.4m

Mustang Minerals (MUM-V) has raised $6.4 million via an offering of flow-through and common share units. The proceeds will be used to explore and develop the Bannockburn and Manchester nickel properties in Ontario.

The junior issued 4.1 million flow-through units at 80 apiece, with each unit consisting of one flow-through share plus half a warrant. A whole warrant is good for one share at $1.15 per share until Dec. 16, 2005.

Mustang also sold 4.5 million share units at 70 each, with each unit consisting of one share accompanied by one warrant. A warrant allows the holder to buy one share for 90 per by the same date. All the shares are subject to a hold period of four months.

Jennings Capital acted as agent for the offering.

At the Bannockburn property, the company intends to drill-test the recently discovered C zone, where sampling of massive and disseminated sulphides at 11 spots along the 150 metres of exposed strike length has yielded 0.19-4.85% nickel plus 0.01-0.5% copper. Cobalt and platinum group metals assay results are pending. Drilling will also target some adjacent anomalies.

Mustang can earn a 100% interest in Bannockburn by paying $60,000 to Outokumpu Mines and spending $350,000 on exploration. The vendors retain a 2% net smelter return royalty.

Meanwhile, the company can earn a 60% interest in Manchester from Inco (N-T) by spending $1.35 million on exploration and issuing 500,000 shares over four years. It can boost its stake to 70% by completing a bankable feasibility study. Inco can back in to a 70% stake if a deposit of at least 300 million lbs. nickel is delineated.

The property covers a 2.5-km stretch of the Manchester Offset dyke on the south range of the Sudbury igneous complex.

In November, Mustang reported that three shallow holes sunk along 30-metre drill centres at Manchester confirmed the presence of nickel-copper mineralization cut by historical Inco drilling on the so-called Manchester Offset Dyke.

Mustang’s holes returned 0.16-0.35% nickel and 0.17-0.28% copper over intervals 4-6 metres. The Inco drilling yielded up to 4.65% nickel and 0.64% copper over widths of 1-10 metres.

Plans at Manchester call for geophysical surveying over the MOD to identify primary drill targets.

Mustang has 32.2 million shares outstanding.