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Homestake Resource Announces $4.5 Mln Financing For BC Project Exploration

Canadian exploration company Homestake Resource (CVE:HSR) announced Tuesday a $4.5 million financing to fund a 2012 exploration program at its Homestake Ridge project.

The proposed non-brokered financing will consist of flow-through common shares and non-flow-through units.

The company will issue a maximum of 10 million flow through-shares to Canadian resident investors, priced at 25 cents per share for gross proceeds of up to $2.5 million.

These funds will be used for Canadian exploration expenses at the company's Homestake Ridge and Kinskuch projects in British Columbia, related to exploration during 2012 to 2013.

Homestake also said a maximum of 10 million units priced at 20 cents each will be issued for total proceeds of up to $2.0 million. Each unit is made up of one common share and one share purchase warrant.

A whole warrant entitles the holder to purchase one common share at a price of 30 cents for 36 months.

The proceeds from the non-flow through units will be used for working capital.

Drilling on the Homestake Ridge project in 2012 will outline the extent of mineralization discovered in 2011 at the South Reef deposit, which is located roughly 800 metres to the southwest of the Homestake Silver deposit.

The planned holes will offset three holes from the 2011 program that tested a 75 metre strike-length of the mineralized trend to depths of 260 metres, and intersected more than 30 grams per tonne (g/t) gold in each hole, including a 3.1 metre interval averaging 30.8 g/t gold and 3.3 g/t silver from drill hole HR11-232.

The company said drilling will target much of the 1.2 kilometre strike length of this newly identified, mineralized zone, which represents the third high-grade gold/silver deposit discovered in this district.

Mineralization remains open at depth and along the full strike-length of the target horizon, the company said, which is equal to the cumulative strike-length of the previously delineated Main Homestake and Homestake Silver deposits.

The Homestake Ridge project in northwestern British Columbia is being advanced as a potential high-grade underground mining operation with a current NI 43-101 compliant indicated resource, at a 3.0 g/t gold equivalent cut-off, of 191,000 ounces gold and 1.35 million ounces of silver. It also has an inferred resource of 530,000 ounces gold and 13.47 million ounces of silver.

Two deposits have been delineated to date, with a third, South Reef, discovered late in 2011.

Homestake also holds an option to acquire the 623-square-kilometre Kinskuch project located adjacent to, and to the southeast of the company's Homestake Ridge project.

A defined resource at South Reef and possibly at Kinskuch, together with any new discoveries, will add to the NI 43-101 compliant resources at the two deposits already discovered and delineated the Homestake Ridge property.

In April, the TSX Venture Exchange approved the company's share consolidation as well as a corporate name change from Bravo Gold to Homestake Resource Corporation.

Shares traded at 24 cents Tuesday afternoon.