Rye Patch Gold Corp. entered into an agreement with PI Financial Corp., acting as lead underwriter on behalf of a syndicate of underwriters, to raise about C$10 million via a bought-deal financing.

The underwriters agreed to purchase 38,470,000 Rye Patch common shares at 26 Canadian cents apiece, according to a June 6 release.

The company also granted the underwriters an overallotment option to buy an additional 5,770,500 shares, exercisable in whole or in part, at any time for up to 30 days following closing.

Net proceeds will be used for the continued expansion of the Florida Canyon gold mine in Nevada, additional haulage equipment, resource development and exploration drilling at the project. The funds will also be used for working capital and general corporate purposes.

The financing is expected to close by June 29.