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Labrador Gold (TSXV: LAB) announced on Monday that it has closed a non-brokered private placement of 14 million flow-through units at a price of C$0.70 per unit for gross proceeds of C$9.8 million (about $7.8 million). New Found Gold (TSXV: NFG) and mining billionaire Eric Sprott each purchased 7 million units through a donation arrangement.

Under the offering, each unit consists of one flow-through common share and one-half a non-flow-through share purchase warrant, with each full warrant exercisable to acquire a common share at C$0.75 until April 16, 2023.

As of noon EST, shares of Labrador Gold were trading at C$0.62, up 3.3% for the session. The Eastern Canada-focused gold miner has a market capitalization of approximately C$68.5 million.

Proceeds of the financing will be used to advance the company’s Kingsway gold project, located in the Gander gold district of Newfoundland and contiguous to New Found Gold’s Queensway project, where a high-grade discovery of 92.86 g/t Au over 19.0 metres was made in fall 2019.

Sprott is currently a shareholder of New Found Gold, and recently raised his stake in that company to 18.4% through a C$15 million investment.

“I am pleased to welcome New Found Gold and Mr. Sprott as shareholders of LabGold. Their participation in this financing is a vote of confidence in the company and in the potential of our Kingsway project,” Labrador CEO Roger Moss said in a media release.

“As we ramp up our spring/summer program we are well capitalized to expand our aggressive exploration targeting Big Vein and the quartz vein corridor to make the next discovery in the Gander gold district,” he added.