Yellowhead Mining Inc. announced Thursday morning that it is deferring work on its proposed Harper Creek mine southwest of Vavenby.
The company recently completed a rights offering that raised about $1.1 million.
According to Yellowhead, the proceeds of the rights offering will be used for general corporate and working capital purposes as well as to repay a loan from Matco Capital Ltd.
However, the net proceeds are not sufficient for the company to complete the environmental assessment for the Harper Creek project.
In light of current conditions in the commodity markets and the international capital markets, Yellowhead’s board of directors has concluded that it is in the best interest of all shareholders to defer any additional expenditures on the Harper Creek project until such time as more favorable commodity and capital markets present themselves.
The rights offering began on Sept. 2 and closed on Sept. 29. Under the offering, those holding Yellowhead shares were allowed to buy an additional share at a price of $0.045 for every four shares already held.
A total of 14 million common shares were issued under the basic subscription privilege and a total of 10 million common shares were issued under the additional subscription privilege, resulting in the total number of issued and outstanding common shares of the company currently being 124 million common shares.
Harper Creek is a proposed 70,000 tonnes-per-day open pit copper mine with a 28-year mine life, located about 10 km from Vavenby. According to the company, Harper Creek would provide up to 600 jobs during construction and up to 450 permanent jobs during operations if developed.