Financing from Hong Kong will help restart development at a gold mine project north of Timmins.
Toronto's Gowest Gold announced Jan. 24 that Greenwater Investment Hong Kong will be sinking up to $19 million into the mining development company's Bradshaw gold deposit.
Greenwater is a privately-held investment company located in Wan Chai, Hong Kong. It was incorporated in August 2019. It is also a creditor of Gowest as of October 2019 and holds 16 per cent of its outstanding common shares.
Gowest's only asset is its Bradshaw Project, 32 kilometres northeast of Timmins.
A 2015 preliminary economic assessment placed an indicated resource estimated at at 2.1 million tonnes, grading 6.19 grams per tonne gold (g/t) containing 422,000 ounces, and an inferred resource of 3.6 million t grading 6.47 g/t containing 755,000 ounces.
“Our approval of this financing transaction follows an exhaustive search and evaluation of potential sources of capital undertaken by our management team and board of directors over the past several months," said Gowest Chair C. Fraser Elliott in a company news release.
"This transaction will provide us the opportunity to restart operations at Bradshaw and advance our ambitious development plans for the project for the benefit of all of our stakeholders.”
Gowest president-CEO Dan Gagnon called it "great news" for the company and its shareholders.
"This investment will enable Gowest to restart mining activities at Bradshaw and continue to move towards production. We anticipate this year will be important for our growth, as we also plan to expand our geological resources and reserves through additional exploration."
A news release said, through a private placement, Greenwater has agreed to purchase promissory notes from Gowest worth $7.5 million, which shall be convertible into units at an issue price of $0.13 cents per unit for an aggregate purchase price of up to $11.5 million. Assuming the completion of this offering, Gowest said it will raise proceeds of $19 million.