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Minnova Corp
Symbol MCI
Shares Issued 40,082,984
Close 2021-01-07 C$ 0.33
Recent Sedar Documents

Minnova arranges $1-million private placement

2021-01-07 19:06 ET - News Release

Mr. Gorden Glenn reports

MINNOVA CORP. ANNOUNCES NON-BROKERED PRIVATE PLACEMENT OF UP TO $1,000,000

Minnova Corp. has arranged a non-brokered private placement financing to raise gross proceeds of up to $1-million through the issuance of up to 1.2 million common share units at a price of 25 cents per unit for aggregate gross proceeds of up to $300,000 and up to 2,187,500 flow-through units at a price of 32 cents per flow-through unit for aggregate gross proceeds of up to $700,000. Each unit will consist of one common share of the company issued on a non-flow-through basis and one common share purchase warrant. Each whole warrant shall entitle the holder to purchase one common share at an exercise price of 35 cents for 24 months from the closing date of the offering. The warrants are callable at any time, following the customary hold period and prior to the expiry of the warrants, if the daily volume-weighted average trading price of the company's common shares on the TSX Venture Exchange is greater than 55 cents for more than 20 consecutive trading days. Each flow-through unit will consist of one common share of the company issued on a flow-through basis and one-half of a common share purchase warrant. Each whole warrant shall entitle the holder to purchase one common share at an exercise price of 35 cents for 24 months from the closing date of the offering. The warrants are callable at any time, following the customary hold period and prior to the expiry of the warrants, if the daily volume-weighted average trading price of the company's common shares on the TSX Venture Exchange is greater than 55 cents for more than 20 consecutive trading days.

The closing of the offering is expected to occur on or about Jan. 21, 2021, and is subject to the completion of formal documentation, including, but not limited to, receipt of regulatory approvals, including approval of the TSX Venture Exchange. All securities issued pursuant to the offering will be subject to a statutory hold period expiring four months and one day after closing of the offering.

Gorden Glenn, chief executive officer, commented: "Proceeds from this financing will enable the company to aggressively advance the project with additional step-out and infill drilling that will support an updated resource estimate targeted for late Q2 2021. Step-out drilling will target the PL North mineralized structures (PLN). This target is located outside the limits of the current PL deposit resource. Recent drilling has identified a number of high-grade, gold-mineralized structures at relatively shallow depths. The PLN target area is located just 300 metres west of the 1,000-[tonne-per-day] mill. Considering the shallow depths and proximal location, relative to the mill, the PLN target will be prioritized for drilling as it could materially impact the resource and future mine development plan. We also plan to make our first hires for our development and operations team, and initiate various optimization studies which will include test mining and bulk sampling programs. I would remind investors that the PL mine has considerable gold price leverage based on the positive 2017 feasibility study (2017 FS), which was completed at gold price of $1,250 (U.S.) per ounce (see discussion on PL mine feasibility financial analysis and sensitivities, and [the attached table]). It also has a relatively low capex and is permitted to resume production under Environment Act licence 1207E. While the current positive gold price outlook combined with potential for near-term production are key elements of our value proposition, we believe we can add significant additional value by demonstrating the resource expansion and exploration potential of the property."

PL mine feasibility financial analysis and sensitivities

Since the beginning of 2020, the gold price has increased steady, with a recent price over $1,900 (U.S.) per ounce. This is well above the base-case financial analysis from the 2017 FS, which used a gold price of $1,250 (U.S.) per ounce, to yield a pretax net present value (5 per cent) of $55.9-million and internal rate of return of 65 per cent, and an after-tax NPV (5 per cent) of $36.7-million with an IRR of 53 per cent. The results of the sensitivity analysis for the base case indicate that the project is sensitive to changes in gold price. For example, in the attached table, one can see the impact of an increase in gold price to $1,875 (U.S.) per ounce (approximately 50 per cent higher than the 2017 FS) on the project's after-tax NPV (5 per cent). In the case of the PL mine restart, a 50-per-cent increase in gold price could potentially increase the project NPV (5 per cent) from the base case of $36.7-million to $185.62-million, a potential increase of over 400 per cent.

 RESULTS OF GOLD PRICE SENSITIVITY ANALYSIS OF THE BASE CASE (2017 FEASIBILITY STUDY)

                           Variation of parameter relative to feasibility study base case
                                 (base-case gold price ($1,250 (U.S.) per oz = 0 per cent)
         
Gold price (U.S.$/oz) $1,125   $1,250  $1,375  $1,500   $1,625   $1,750   $1,875   $2,000 
% change                 -10%       0%     10%     20%      30%      40%      50%      60%   

ATNPV5% ($M)           $6.21   $36.70  $66.49  $96.28  $126.06  $155.84  $185.62  $215.38 
IRR %                     16%     53%      82%    109%     135%     160%     184%     209%  

(1) Readers are cautioned that the above sensitivity analysis only considers a single change
    in a variable (that is, the change in price of gold) and does not consider any changes in
    other variables that may have occurred since the completion of the 2017 FS.

About Minnova Corp.

Minnova is an emerging Canadian gold producer focused on restarting the PL gold mine, and expanding gold resources on its PL and Nokomis gold deposits. The company has completed a positive feasibility study in support of restarting the PL mine at an average annual production rate of 46,493 ounces over a minimum five-year mine life. The resource remains open to expansion, and future surface exploration work programs will target resource expansion. The PL gold mine has a relatively short preproduction timeline forecast at 15 months, benefits from a valid underground mining permit (Environment Act 1207E), an existing processing plant, over 7,000 metres of developed underground ramp to minus 135 metres depth, is fully road accessible and close to existing mining infrastructure in the prolific Flin Flon-Snow Lake greenstone belt of central Manitoba.

Qualified person

Chris Buchanan, MSc, PGeo, a consultant of the company and a qualified person under National Instrument 43-101, has reviewed and approved the scientific and technical information in this press release.

We seek Safe Harbor.

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