Gold window opens as bought deals return

With the price of gold up about 10% since the start of the year to record levels of almost US$2300/oz and mergers and acquisitions activity starting to gain pace, the financing window for junior explorers appears to be reopening with the return of bought deal private placements.

Yukon, Canada gold explorer Snowline Gold has entered into a bought deal agreement with Cormark Securities and BMO Capital Markets to raise C$25 million by selling 3.2 million charity flow-through shares at a price of C$7.80 per share.

Snowline also just raised C$12.5 million through the exercise of 5 million warrants held by Ana Maria Cox de Gubbins, who increased her stake in the company to 10.6%. This took Snowline's treasury to C$46.3 million, and with at least another C$25 million to be added via the bought deal, it will increase to more than C$70 million, making it one of the best-funded junior explorers.

Snowline is not the only company with a bought deal open, as Brazilian gold explorer Meridian Mining also announced one this week with Beacon Securities and BMO Capital Markets to raise C$15 million by selling 42.9 million shares at 35c per share.

Shares in Snowline Gold are trading at C$5.97, valuing the company at C$864 million.

Shares in Meridian Mining are trading at 36c, valuing the company at C$87 million.