Silver Crown Royalties (Cboe: SCRI) soared to an all-time high on Tuesday following a $3-million investment from Michael Gentile, a prominent investor in the junior mining sector.
Shares in the company gained 36% to close at $7.94 apiece on Tuesday in Toronto for a market capitalization of $43 million. Gentile purchased 424,500 units, each consisting of one common share and a share purchase warrant, at a price of C$7 per unit.
The investor, co-founder of Montreal-based hedge fund Bastion Asset Management, is the largest shareholder in over 25 junior miners. Before that at Formula Growth in Toronto, he oversaw roughly a 20-fold increase in assets under management in less than a decade. In addition to his Silver Crown investment, Gentile will also serve as the company’s strategic advisor, a position he holds with several mining companies.
“Michael’s deep industry knowledge and contacts should serve the shareholders of Silver Crown in the near-term with an expected lower cost of equity capital,” Silver Crown CEO Peter Bures said.
Silver surge
Gentile’s investment will be used to expand Silver Crown’s portfolio and “capitalize on the favourable outlook for rising silver prices,” Bures said. It will be allocated primarily towards specific accretive silver royalties as well as general working capital.
Silver rose to a new peak on Tuesday at just north of $89 an ounce. So far this year, the metal has gained nearly 12%, outperforming most commodities.
Silver Crown holds royalties on five properties across Canada and Latin America. These include PPX Mining’s (TSXV: PPX) Igor mine in Peru, Pilar Gold’s (TSXV: PGDM) PGDM project in Brazil, and the Scotia mine in Nova Scotia being developed by EDM Resources (TSXV: EDM).
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