The agreement, with Cormark Securities and PI Financial Corp, will see the company offer for sale, on a best efforts basis, up to 20 million units at a price of 25 cents each.
Every unit will be made up of one common share, and one share purchase warrant, with each warrant allowing the holder to acquire one additional share at a price of 40 cents for a period of one year after the closing date.
The new funds will be used for exploration, the company said, and for general corporate purposes. Closing of the deal is anticipated on about February 7, subject to regulatory approvals.
West Kirkland's focus is regional exploration on the Long Canyon trend, which is marked by the Long Canyon deposit in the southwest and its TUG deposit 65 kilometres to the northeast. The miner, which also has mineral rights in Kirkland Lake, Ontario, has the dominant land position between these two deposits.
In late November, the junior gold explorer commissioned Roscoe Postle Associates to start a preliminary economic assessment on the TUG deposit.
The scope of the report, which is expected to be wrapped up by the end of this quarter, will include an updated pit-constrained resource, the evaluation of existing metallurgical work, engineering of mine layout and scheduling and process design.
Shares in the company have run higher lately in anticipation of the study, with its stock up more than 27% so far this year.
Pending the outcome of the report, permitting and additional studies, a construction decision on the TUG project could happen in the second quarter of 2013, West Kirkland added.
The TUG deposit, which will be studied with a conventional open pit and heap leach design, is near the paved highway, and exposed at surface, with its features expected to provide for a potential short construction period.
The property is under option from Fronteer Development Inc., a subsidiary of Newmont Mining Corporation. Under the agreement, West Kirkland can earn a 60 per cent interest in the property by spending a total of $4.0 million. As of November, it had spent around $3.4 million, securing a 51 per cent stake.
TUG, which sits in Box Elder County, Utah, hosts a shallow oxidized gold resource that was extensively drilled by previous operators.
The first NI 43-101 compliant resource estimate on the property was released by West Kirkland in May, and showed an inferred resource of 679,000 gold equivalent ounces, contained in 27.1 million tonnes grading 0.49 g/t gold and 15.8 g/t silver using a cut-off 0.1 g/t gold. *
**Michael G. Allen, Vice President of Exploration for West Kirkland and a qualified person as defined by NI 43-101, has reviewed and approved the technical information in this news release. He is the non-independent qualified person for the purpose of this news release.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.