Platina Resources Limited’s (ASX:PGM) (OTCMKTS:PTNUF) (FRA:P4R) strategy to build its gold presence in Western Australia has been boosted on receiving approximately A$2.64 million from the sale of 6 million shares in Canadian-listed Major Precious Metals Corp (CSE:SIZE) (OTCMKTS:SIZYF) (FRA:3EZ).
Major’s flagship Skaergaard Project hosts one of the world’s largest undeveloped gold deposits and one of the largest palladium resources outside South Africa and Russia.
This project was sold to the Canadian junior mining and exploration company by Platina with the shares forming part of this transaction.
The funds raised through the sale will be primarily used to fund Platina’s gold exploration activities in Western Australia.
Building a gold portfolio
Platina managing director Corey Nolan said that the company would still hold 49 million Major shares following the transaction with a value of approximately A$23 million.
“We are moving full steam ahead to build a gold portfolio in Western Australia.
“Western Australia is a world-class geological destination with excellent support infrastructure, and amongst the world’s best perming and development approval regimes.”
Best option to secure funding
Nolan said: “Selling some of our Major shares was the best option to secure new funding for growth.
“Raising capital through an offering of Platina shares when we have a negative enterprise value, and they are trading at a substantial discount to our investment portfolio valuation wasn’t deemed to be the optimal capital management strategy.
“The sale process also addresses concerns about the liquidity of our investments and capacity to realise value.”
Optimism about Major
Nolan explained that he remained very optimistic about the future potential of Major with the company poised to release a new mineral resource estimate, begin a new preliminary economic assessment, and complete a substantial drilling program later this year.
He said: “This all comes at a time when we are seeing record prices for palladium metal which last traded at US$2,662 per ounce, a substantial premium to the current gold price,”
“We remain very optimistic about the outlook for precious metals which positively impacts our asset and investment portfolio.”