Canyon Resources (ASX: CAY) has received a major vote of confidence in the company's gold focused Burkina Faso based projects, with an up to A$1.4 million placement priced at $0.35 - a 9.4% premium to the market.
The placement will primarily be subscribed by Canadian based Dynamic Precious Metals Fund, which is part of the Goodman and Company, Investment Counsel Ltd group - which holds more than C$12 billion in assets.
The placement of shares, struck at a premium to market price in the current volatile markets and to the Goodman and Company fund, is a coup for Canyon Resources.
Phil Gallagher, managing director of Canyon, added “We are delighted to welcome Goodman and Company as a substantial shareholder of Canyon Resources.
"We are pleased by the strong support demonstrated by Goodman and Company by investing in Canyon at a premium to market, particularly in light of current market conditions”.
The interest no doubt from Canadian group is due to some promising maiden reverse circulation drilling results by Canyon announced last week from Burkina Faso.
At the Tao project the first assays to be received from 11 of 73 holes from a 7,000 metre program included:
- 24 metres at 1.89 grams per tonne (g/t) gold from 20 metres, including 8 metres at 5.07g/t gold; and
- 20 metres at 1.95g/t gold from 84 metres, including 8 metres at 4.18g/t gold.
The initial results compliment previous drilling results and confirmed the potential for significant gold mineralisation at the project.
Canyon holds a significant 2,513 square kilometre footprint in the West African country, which covers ten permits in three project areas called Taparko North, Tao and Derosa - strategically located in the Birimian Greenstone Belts.
Highlighting the potential for Canyon in the area, Taparko North is situated in the Yalogo Belt which hosts the 2 million ounce Taparko gold mine and the 1.7 million ounce Inata gold mine.