Iamgold ups Merrex stake to 14% as Mali project gears up
Merrex Gold announced on Thursday a private placement worth $1.75m with Iamgold, its earn-in partner on the Siribaya Gold Project in Mali, which is potentially a 5m ounce deposit.
Merrex's agreement with Iamgold will see the company take a 50% stake in Siribaya with Iamgold spending $10.5m on exploration over four years. In a note to investors Merrex said that spending on the 800 square km Mali project which kicked off in 2005, is being accelerated.
3,500,000 units at a price of $0.50 have been placed with each unit comprising of one common share and one-half of one share purchase warrant, each full share purchase warrant being exercisable until September 31, 2012 at a price of $0.75 per share.
Upon closing this purchase will increase Iamgold's shareholding to 16,616,883 common shares representing approximately 14% of the issued capital. The proceeds from the private placement will be added to working capital.
The private placement is subject to regulatory approval. Upon issuance, the private placement shares will be subject to a four-month hold period. The trading price of Merrex's shares on the TSX Venture Exchange on June 2, 2011 was $0.50 per share. Merrex stock is up 23.5% so far this year. Early in May this year Iamgold invested $2.5m in Merrex at $0.55/share.
Siribaya consists of six contiguous exploration permits covering more than 800 square kilometers. The 2011 exploration program within the Siribaya structures include 30,000 metres of RC drilling to further extend the explored strike length of the Siribaya trends from three to seven kilometres, and 10,000 metres of diamond drilling to increase the present NI 43-101 resource.
Outside of the Siribaya structures new mineralized trends have been discovered: Siribaya West which lies to the west of the Bambadinka trend, and the Babara trends which lie to the east of Siribaya on the Babara and Kofia permits. These trends will be further tested during the 2011 field season including the commencement of RC drilling on the Bambadinka trend.
Merrex Gold also owns 100% of the Jubilee Zinc Deposit in Nova Scotia.