Queenstake taps anonymous investor

Queenstake Resources (QRL-T) has concluded an agreement with an anonymous benefactor for a financing worth $1.2 million, which should help the Denver-based junior advance the Magistral gold project in Mexico.

The financing consists of two parts, with most of the funds coming in the form an unsecured convertible note worth $968,783.

The second part consists of the sale of 1.6 million units for proceeds of US$224,640. Each unit consists of one share and one 3-year warrant that can be exercised to buy another share at 18 in the first two years. Thereafter, the price will be 20.7.

The Magistral property, situated in northern Sinaloa state, contains reserves of 368,400 oz. gold (in 6.15 million tonnes grading 1.86 grams gold per tonne) and is projected to produce 40,000 oz. annually over a mine life of seven years. A May 2000 feasibility study pegged preproduction capital costs at US$14.3 million, including US$923,000 in working capital and US$821,000 in refundable taxes. If all project financing is arranged, construction could begin in the first quarter of 2001, with startup slated for the third quarter.