- Eric Sprott will expand his holding in Chesapeake Gold (CKG) by C$15 million as part of a $20 million private placement
- The company intends to issue four million common shares at a price of $5.00 each
- The Sun Valley Gold Master Fund, another existing shareholder, will acquire the remaining $5 million portion of the placement
- Chesapeake intends to use the proceeds to fund metallurgical test work at its Metates project in Mexico, as well as ongoing regional exploration activities
- Chesapeake Gold (CKG) is currently steady at $5.19 per share
Eric Sprott will expand his holding in Chesapeake Gold (CKG) by C$15 million as part of a $20 million private placement.
Under the terms of the non-brokered placement, the Vancouver-based development-stage mining company will issue a total of four million common shares at a price of $5.00 each.
Eric Sprott currently holds 11.8 per cent of Chesapeake's issued and outstanding shares. Following the completion of the placement, his holding will be approximately 16.4 per cent, or around nine million common shares.
The remaining $5 million portion of the placement will be acquired by The Sun Valley Gold Master Fund, which currently holds 7.4 per cent of Chesapeake's issued securities. Once the placement is complete, this amount will jump to 8.6 per cent, or around 4.8 million common shares.
Chesapeake intends to use the proceeds to fund metallurgical test work at its Metates project in Durango, Mexico, which is considered to be one of the largest undeveloped gold and silver deposits in the world.
According to a NI 43-101 report conducted by Independent Mining Consultants of Tucson, Arizona, the project is thought to host proven and probable reserves of 18.5 million ounces of gold, 526 million ounces of silver and 4.2 billion pounds of zinc.
A portion of the proceeds will also be used to fund ongoing regional exploration activities, as well as for general working capital.
Randy Reifel, President of Chesapeake Gold, noted the world-class potential of the Metates project and its position in a renowned pro-mining jurisdiction.
"Eric Sprott and Sun Valley Gold Master Fund continue to be strong supporters and recognise as major shareholders this compelling opportunity in a record high gold and silver market.
"We believe the potential future development of Metates together with the satellite exploration project pipeline will create long term significant value for our shareholders," he added.
Chesapeake Gold (CKG) is holding steady at $5.19 per share at 12:32pm EDT.