North Bay Resources Inc. (OTC:NBRI) earlier this week announced the launch of a private placement aimed at scaling up production at its Fran Gold Project.
The company said the offering is structured to provide investors with approximately fifty percent of their investment in physical gold, with the balance in common shares. It highlighted that this approach is intended to differentiate North Bay from other junior mining companies and broaden its potential investor base.
The company told investors that production has already commenced on a continuous basis and that the funds raised will be used as operating capital to expand output. Jared Lazerson, CEO, said the initiative is designed to ramp monthly production from about five hundred thousand U.S. dollars to three million U.S. dollars.
Proactive: You’re launching a private placement from the company, a really interesting one. You’re literally giving shareholders part of the company. Tell me about this unique offering.
Jared Lazerson: Sure. The focus is on physical gold. We wanted to show differentiation between other junior small-cap mining stocks and reflect the progress we’ve made over the last year since I’ve taken it over. We’ve been in small production. The focus of this private placement is to now crank up production.
We produce continuously as of earlier this month. We are putting together operating capital for additional gold production. What this is really, is going to investors for the equivalent of an advance against offtake. We take investor money, put it into production, and have significant stockpiles—many millions in gold—in stockpile.
It’s about 60/40, maybe a little more depending on the price of gold—so about 60% gold and 40% common shares. It’s almost half and half, physical gold and shares. It’s on a first come, first serve production basis. As we produce, we ship the gold, process it, pour bars, and then ship that to investors.
It’s an interesting offering, but again, it differentiates us. It ultimately doesn’t matter to us where the gold goes. We’re just as happy that it goes to investors. The last thought is to really split the market—moving from the limited junior mining stocks market to a broader market interested in buying gold.
I don’t want to say it’s effectively at a discount—it’s more right at fair value. But it opens up that gold market. The point is to differentiate and say, look, we’re producing. We need a chunk of investment to crank up to about $0.5 million a month in initial production. That will allow us to grow organically to about $3 million a month, which is our capacity at the grade we’re seeing from our Fran Gold Project.
You’re looking to raise about US$1 million in this offering. What has been the reaction so far when you tell people they’re also getting a little piece of gold?
Not a little piece of gold—almost 50/50 gold. We just launched on Friday. This is one of the first interviews and media pieces. We’re going into the slow season in early July. But I think it reaches a very broad audience. The initial response from shareholders since Friday has been that they love it because it shows confidence.
It’s having the effect. It’s not exactly what I predicted, but you’re in media—you know how it is. The response is never exactly what you expect. As long as it’s positive, the flavor doesn’t matter. Stock traded decent volume on Friday. I didn’t see it as a market event, but it showed we’re moving ahead and production-oriented.
So many junior mining companies get stuck in exploration. It’s become a difficult business model. We are focused on advancing production alongside developing resource. Ounces in the ground are important as the company’s backbone, but production is going well. It has taken about twice as long to come online as expected. But we have continuous production, and the first thing we do is go to market to crank it up.
That’s the sole focus. We’ll need to do a bit of exploration when we’re on site, but generally we’re just shipping. We have stockpiles and identified our initial mining block. I was up at the project for a week. We have 4,000 to 5,000 tons in stockpile and 4,000 to 5,000 tons ready to go in the mining block. We’re pressing into the five to ten million dollar range already dialed in, and then we can advance from there.
Quotes have been lightly edited for style and clarity