Shares in Condor Gold PLC (LON:CNR) were more than three per cent better off in early trade in London this morning, after the company revealed that renowned Canadian mining investor Ross Beaty was one of the key participants in a £2.6 mln placing.
The money will be raised via the issue of 6.45 mln new units priced at 40p each, with each unit consisting of one share and two-thirds of a warrant entitling the holder to purchase an additional share at 60p.
Adding unlisted warrants to a share placing is a classic Canadian fundraising tactic and will no doubt have been driven in part by a desire to secure Beaty as an investor.
Following the issue of the new shares, Beaty will hold just over 7% of the company. But he’s not the only Canadian to have found the terms attractive enough to come on board this time round.
A specialist resource fund affiliated to Sprott Inc., probably the biggest name of all in Canadian junior mining investment, has also come on board.
The arrival of these two Canadian giants on the Condor register marks a significant step change in the corporate development of the company, after it emerged from a mandatorily-imposed bid period at the end of last year and subsequently released highly attractive results from a pit optimisation study run at the La India gold project in Nicaragua by the famous Whittle Consulting team.
That study showed that La India has the potential to produce between 91,000 and 165,000 ounces of gold over the first five years of mining, and has an average NPV US$195M. It willhave been a significant factor in convincing Sprott and Beaty to sign up.
But a technical team from Beaty’s organisation has been down to La India to see it for themselves, and their positive appraisal is a significant boost for the project’s credibility.
“They like the 2.4 mln ounces that we have,” says Condor’s executive chairman Mark Child, “and they like the four grams grade. But then they also like the fact that La India hosts a big gold deposit and that we’re understanding it much, much more as a district play.”
And it’s that aspect that Child believes is a huge tick in the box this time round. “These are people who know what we’re looking for here,” he says. “Sometimes it’s difficult to get that across to the market.”
But when Canada’s biggest mining names endorse your asset and your strategy with hard cash, that’s worth shouting about.
The plan now, buoyed by the new cash, is to de-risk the project by securing full permitting and land access.
Gold, reckons Child, is “underpinned” by negative interest rates globally, and by the dovish noises made by Janet Yellen last week.
That sets a good context for further progress to take place at La India as Condor begins to deploy the new money.