Pure Gold cashes up with $20 million for Red Lake exploration, mine development: Anglogold Ashanti takes 15 per cent ownership share of northwestern Ontario mine developer.

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Anglogold Ashanti is taking a 14.9 per cent ownership stake in Pure Gold Mining, a mine developer with an advanced gold project in the Red Lake district of northwestern Ontario.

It's part of a larger $20.9-million financing deal announced by Pure Gold on April 27 as it moves the Madsen Gold Project towards a production decision later this year.

Anglogold Ashanti is purchasing 12,800,000 units of Pure Gold for gross proceeds of $7.9 million.

More financing is coming through an agreement with Sprott Capital Partners, acting on behalf of a syndicate of underwriters, to purchase more than 16.1 million units of Pure Gold for $10 million, plus $3 million worth of flow-through shares for gross proceeds of $13 million.

The gross proceeds raised from the sale of the shares are earmarked for exploration financing. The net proceeds from the sale of the units will be used for the exploration and development of the Madsen. The offering was slated to close on May 24, subject to certain regulatory conditions.

The Madsen project contains two significant former producing gold mines with active exploration targets which could...