Kootenay Gold looks to improve odds on Sunshine Mine bid through $20 million placement
Friday, March 26, 2010
Kootenay Gold (TSX-V:KTN; OTC:KOOYF) upped the stakes in the battle to control the Sunshine Silver Mine, which is currently in administration and is will soon be sold via an auction to the highest qualified bidder.
The junior gold and silver company is raising $20 million through the issue of 25 million units at 80 cents per unit – a slight premium to the current share price. Each unit will consist of one share and one half warrant with an exercise price of $1.20 and 12 month expiration date.
Kootenay Gold has lined up a syndicate of brokers to complete the placement, headed up by Union Securities.
“The Sunshine Mine has historically been one of the World’s largest producers of Silver by consistently producing 3 to 5 million ounces of Silver per year (7 million ounces in peak years) at a grade of more than 22 ounces per ton,” Kootenay CEO, James McDonald stated this week. “These funds will be used for the proposed acquisition of Sterling Mining Company…in a joint bid with Alberta Star (TSX.V: ASX)…”
Minco Silver, and Canadian mining junior has also tabled an offer for Sterling Mining, which is the owner of the Sunshine Mine. The mine, which is currently on care and maintenance, is one of the largest past producing silver mines in the world, having produced in excess of 360 million ounces since 1904. The mine currently hosts a measured and indicated resource of 31.5 million ounces of silver grading 21.8 ounces per ton, plus a further 231.5 million ounces grading 101.6 ounces per ton in the inferred category.
Closing dates for bidders has been set by the U.S. Bankruptcy Court, District of Idaho for May 14, 2010. In order to bid, interested parties must first submit an application and deposit to become a qualified bidder.
Kooteny Gold recently joined forces with Alberta Star, which had already announced a US$11.75 million offer to acquire Sterling Mining. Minco Silver has filed an offer of US$12.5 million.
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