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Gowest comes up with $5-million financing plan to revive Timmins mine project

Gold mine developer preparing share offering, holds talks with major investor
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Development at Gowest Gold’s Bradshaw deposit near Timmins (Gowest Gold photo)

Gowest Gold intends to raise $5 million in financing to get its stalled Bradshaw Gold Deposit, near Timmins, back on a track.

The company announced April 30 that it intends to complete a private placement of common shares, a portion of that to be issued on a flow-through basis. Pricing terms will be released at a later date.

Mine development at Bradshaw was suspended after a toll milling agreement with Northern Sun Mining was terminated in mid-April. With 28,000 tonnes of mined material sitting on the surface, the company said there was no room on the property to more material.

Terminating the milling agreement meant Gowest couldn’t go back to its project financier, PGB Timmins Holding LP, who provided the start-up capital, for a second tranche of financing. It forced Gowest to make alternative arrangements.

The Bradshaw deposit is within Gowest’s North Timmins Gold Project, a 109-square-kilometre land package northeast of Timmins. The company wants to start commercial production next year.

They’re projecting it to be a 50,000-ounce-a-year gold producer at peak production over an 8.5-year mine life. There's potential to add more ounces through exploration.

Gowest is also holding out hope that its largest shareholder, Fortune Future Holdings, may come through with a major investment to accelerate mine development and for exploration financing. Fortune may do it alone or bring in a syndicate of investors.

The proposed investment would be comprised of debt, equity or a combination.

“The $5 million financing will allow the company to continue development at Bradshaw while pursuing a more significant investment by Fortune, who has been supportive of our efforts over the last four years,” said Gowest president-CEO Greg Romain in a statement.

“If we can reach an agreement with Fortune, this would expedite the future growth of our company to the benefit of all of our shareholders.”