VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/31/13 -- Homestake Resource Corporation ("Homestake") (TSX VENTURE: HSR)(FRANKFURT: B6IH) has closed the final tranche of its previously reported non-brokered private placement by issuing 500,000 units at a price of $0.15 per unit for gross proceeds of $75,000. Each unit consists of one common share and one share purchase warrant exercisable to purchase one additional common share for a period of two years at a price of $0.20 per share. The Company closed the first tranche of the private placement on December 28, 2012 by issuing 4,852,500 flow through units at a price of $0.20 per unit and 4,012,334 non-flow through units at the price of $0.15 per unit to raise an aggregate of $1,572,350.
Securities issued pursuant to this tranche of the private placement, including common shares, share purchase warrants and finders' warrants issued as finders' fees, carry a legend restricting trading of the securities until June 1, 2013. The private placement and payment of finders' fees are subject to regulatory approval.
Net proceeds from the offering will be utilized to fund continued exploration at the Company's Kinskuch property, as well as general corporate activities. The 623-square-kilometre Kinskuch property is located immediately to the east and south of the Company's Homestake Ridge project, where Agnico Eagle Mining Limited has assumed project management. The Company holds an option to acquire a 100% interest in Kinskuch and the Company's diamond drilling program at the Illiance River target on the Kinskuch property during 2011 was successful in intersecting high-grade silver/lead/zinc VMS mineralization in three of four holes. For example, hole KN11-02 intersected several mineralized zones with the strongest being 2.8m of 318g/t Ag and 8.7% combined lead and zinc; true thickness is uncertain at this time. Surface soil and rock-chip sampling, combined with geophysical data from the Company's 2011 airborne program, has extended mineralization to a 4.5 kilometre strike length. The Company's recently completed financing will allow the Company to begin aggressively exploring this trend in 2013, beginning with drill holes that will offset the 2011 mineralized holes.
The Company also announces the resignation of Scott Hean as a director and member of the Audit Committee effective December 31, 2012. Fred Sveinson, a director of the Company, has been appointed as a member of the Audit Committee. Homestake's Board of Directors wishes to thank Mr. Hean for his efforts on behalf of the company and wishes him well in his future endeavours.
Homestake is a mineral resource exploration and development company that owns direct and indirect interests in prospective mineral properties.
Homestake Ridge Project
Homestake owns a 100 percent interest in the Homestake Ridge project, located in the Kitsault Mineral District in northwestern British Columbia. The project is being advanced as a potential high-grade underground mining operation. At a 3.0g/t AuEq cut-off and based on drilling completed through 2010, the project contains an estimated NI43-101 compliant Indicated Resource of 191,000oz gold and 1,350,000 oz silver (215,500oz AuEq) plus an Inferred Resource of 530,000 oz gold and 13,470,000oz silver (775,900oz AuEq)(1) at the Main Homestake and Homestake Silver deposits. A third deposit was discovered at South Reef late in 2011 and was expanded with drilling in 2012, but mineralization there has not yet been included in resource estimates. To date, 251 holes were drilled for a total of 70,533 metres, and multiple exploration targets remain to be tested on the large 2585-hectare property. Agnico-Eagle Mines Limited has assumed project management under an option agreement to fund exploration and development costs of $25.3 million over a 5-year period to earn a 65% interest in the property and has spent $1.8 million in funding operations in 2012 together with a purchase of 20 million shares of Homestake at a price of $.35 per share. Exploration expenditures under the option agreement for 2013 are $3.5 million.
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