Gediminas Jasionis
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Yukon-Nevada Gold Corp. (TSE:YNG) (PINK:YNGFF) Plans to Raise $59 million

by Gediminas Jasionis May 25, 2011
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yng_chart.pngYukon-Nevada Gold Corp. (TSE:YNG) (PINK:YNGFF) got some traders excited after the company said they will likely be able to raise $59.3 million through equity financings.

YNG share price went up 3.6% by the end of the trading session on Tuesday. Trading volume picked up as well, but barely topped the average of 718 thousand.

Some increase in buying could be seen after the company announced they have negotiated terms to raise $59.3 million through exercise of warrants and a private placement. The proceeds will be used for capital expenditures and for upgrades on Jerritt Canyon Gold Project in Nevada.

To date, the company has already secured $12.5 million in gross proceeds from the exercise of warrants. The holders were encouraged to convert their warrants by the company's initiative to lower the exercise price for a 30-day period which concluded on April 13, 2011. There are still 140 million warrants outstanding that could be converted at a price of 32 cents per share by January 12, 2012.

6yng_logo.jpgDeutsche Bank AG and some institutional investors have already agreed to exercise the remaining warrants for total proceeds of $45 million when the agreement is finalized and regulatory approvals obtained.

Deutsche Bank has also indicated they would be interested to buy $14.4 million worth of units at 43 cents per piece, consisting of one common share and one share purchase warrant exercisable at 55 cents. The final agreement is yet to be made and is subject to regulatory approvals.

Furthermore, the same Deutsche Bank has proposed a gold forward sale opportunity, under which the company could sell up to $120 million worth of would-be production. No definitive agreement has been made yet.

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