Then on Friday, the company announced that it will increase the size of the financing and has now agreed to sell 12.2 million units to the underwriters at the same price to raise gross proceeds of C$18.3 million.
The underwriters will also have the option to acquire up to an additional 15% of the number of units prior to closing. The underwriters are to be paid a cash commission equal to 6% of the gross proceeds, except that a commission of 3% of the gross proceeds will be paid from the sale of units to certain purchasers designated by Prime to account for a maximum of C$3 million.
The net proceeds from the offering will be directed towards exploration and development activities at the Los Reyes gold-silver project.
Located in the Mexican state of Sinaloa, the Los Reyes represents a high-grade, low-sulphidation epithermal gold-silver project that covers a land package of contiguous claims totalling 13,800 hectares. The property is situated in the historically productive Guadalupe De Los Reyes mining district, which has an extensive mining history stretching back into the 1700s.
Historic operating results indicate that an estimated 1 million ounces of gold and 60 million ounces of silver were recovered from five separate operations at Los Reyes between 1770 and 1990. Prior to Prime’s acquisition, recent operators of Los Reyes, including Northern Crown Mines, Meridian Gold, Vista Gold and Great Panther Silver, had spent approximately $20 million on exploration, engineering and prefeasibility studies.
The work by previous Los Reyes operators resulted in a resource estimate of 633,000 oz. gold and 16.6 million oz. silver contained in 19.75 million tonnes measured and indicated grading 1.00 g/t gold and 26.1 g/t silver. The inferred portion totalled 178,800 oz. gold and 6.8 million oz. silver contained in 7.1 million tonnes grading 0.78 g/t gold and 29.9 g/t silver.
Since acquiring Los Reyes in 2019, Prime has spent a further $30 million on direct exploration activities and has completed two phases of comprehensive drilling totalling over 100,000 metres. Results to date suggest the three known main deposit areas, Guadalupe, Central and Z-T, are larger than previously reported.
According to the company, the project remains underexplored to this day and holds potential for additional discovery and resource expansion.
Shares of Prime Mining surged 19.6% by market close Friday to trade at C$1.89 a piece. The company’s market capitalization was C$213.2 million ($157.9m).