In a bid to source funding for additional drilling at its Wenot deposit, Omai Gold Mines has made a deal with Canadian mining company Silvercorp Metals, one of the company’s shareholders, to purchase further shares.
In a statement on Wednesday, Omai noted that the deal would see C$3 million in gross proceedings being generated. The company will be issuing units at a price of C$0.17 per unit. Each unit will consist of a common share and half of a common share purchase warrant.
“Two such half warrants constitute a full warrant (a “Warrant”). Each Warrant entitles the holder to acquire one Common Share at an exercise price of C$0.23 for a period of 36 months from the closing date of the offering,” Omai said in the statement.
“The proceeds from the offering will be used for additional drilling under the Wenot deposit, the preparation of the company’s inaugural 43-101 resource estimate for Wenot, and to advance new high-priority exploration targets at Omai, including Broccoli Hill.”
According to Omai, Silvercorp indicated its intention to subscribe for approximately C$455,000 of the offering. Should total gross proceeds from the offering amount to C$3 million, Silvercorp is expected to hold a 15.2 per cent equity stake in Omai on a basic basis and increase its current ownership to 15.7 per cent on a partially-diluted basis.
The statement also included comments from Omai Chief Executive Officer (CEO) Mario Stifano, who expressed pleasure at the deal. He noted that the potential to significantly expand open-pit mining for minerals was great.
“We are delighted that Silvercorp is maintaining its pro rata ownership in Omai Gold Mines. The positive results from the ongoing drilling and assaying programme at the Wenot target that we previously announced – including 16.0 metres of 9.0 grams per tonne (g/t) gold, 32.1 metres of 3.6 g/t gold, and 14 metres of 9.1 g/t gold, indicates the potential to significantly expand the open-pit mineralisation at Wenot while it remains open at depth and on strike.
“Given the location on the prospective Guiana Shield that is home to other major gold discoveries, Omai exhibits excellent potential to host near surface as well as high-grade gold mineralisation such as hole OMU-28 which drilled 101 metres of 34.91 g/t gold at the Fennell deep target.”
Omai said: “The offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange (Canadian Stock Exchange).”
Omai Gold Mines, which has already started a 5000-metre drilling programme in the Wenot pit, had announced in April the presence of high-grade gold in the first two holes that extend at least 100 metres below ground.
The company only returned to the Wenot and Fennell pits at the Region Seven (Cuyuni-Mazaruni) site in 2020 after leaving Guyana in 2015. It had announced in December that it would be pressing forward with the 5000-metre drilling programme.
It was only last November that Omai Gold Mines, which is aiming to reclaim its place as Guyana’s top gold producer, announced the impending resumption of trading on the Toronto Stock Exchange, following the recent reverse takeover of Avalon Investment Holdings.