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Vancouver's Far West Mining (TSX: FWM) has arranged a private placement of 2.44mn units at Cdn$4.10 each for total proceeds of Cdn$10mn (US$9.7mn), the company reported in a release.
Proceeds will be used for the development of the Santo Domingo copper-iron ore project in Chile's northern region III, and for exploration and working capital.
The private placement, arranged with the Pacific Road Resources Funds (PRRF), is scheduled to close by October 15, subject to customary conditions, the company said. Under the terms of the arrangement, each unit consists of one Far West common share and one transferable common share purchase warrant.
PRRF will be granted anti-dilution rights to maintain its investment in Far West. Upon closing, PRRF will hold an equity interest of 8.65% in the company, increasing up to a maximum of 11.96% if all warrants issued as part of this placement are exercised.
Far West expects to complete a prefeasibility study on Santo Domingo by year-end. The project contains indicated resources of 486Mt grading 0.57% copper equivalent at a 0.25% copper equivalent cut-off, according to the most recent NI 43-101 compliant resource estimate.
Santo Domingo is expected to start producing 65,000t/y copper, 2.7Mt/y iron ore and 23,000oz/y gold by 2013 or 2014.