Pure Gold Mining (LON: PUR) shares are climbing Wednesday on news it has agreed to issue 3.3 million units of the company at C$1.05 per unit for gross proceeds of approximately C$3,473,000 on a non-brokered basis to Anglogold Ashanti Limited.
Each unit comprises one common share and one-half common share purchase warrant, with the purchase warrant entitling Anglogold (or holder) to purchase one common share at C$1.36 for 18 months from the transaction's closing.
The company said it intends to use the net proceeds to fund the continued ramp-up of operations at its 100%-owned PureGold Mine Project located in Red Lake, Ontario, underground drilling and development of the high-grade 8 zone, and general corporate purposes.
Anglogold currently owns approximately 14.3% of the issued and outstanding common shares of Pure Gold.
The transaction is expected to close on or about October 15.
Pure Gold's share price has moved 2% higher on the news, currently trading at 51p. However, its stock is down 66% for the year-to-date.
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Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.