Luna Gold Corp. and JDL Gold Corp. completed their merger to create Trek Mining Inc., which holds the Aurizona gold project in Brazil as its main asset.
The companies raised C$83.4 million via a private placement financing as part of the deal, which was originally expected to close late March, and now Trek holds about C$113 million in cash.
The private placement, originally targeting C$27 million, was increased to between C$60 million and C$65 million in late February. Meanwhile, the underwriters of the C$15 million bought-deal private placement exercised the C$5 million overallotment option in full, for total proceeds of C$20 million.
An ongoing feasibility study at the project will soon be completed and first gold pour is targeted for year-end 2018, one of Luna's largest shareholders, Sandstorm Gold Ltd., said in an April 5 statement.
Sandstorm said it secured a 15.77% stake in Trek as part of the placement and can increase it to 19.86% by exercising all of its warrants in Trek. Sandstorm holds a 3% to 5% sliding scale net smelter returns royalty on Aurizona.