Junior miners and explorers cashing up

Vancouver — Numerous explorers have launched substantial financings just as the networking-heavy Prospectors & Developers Association of Canada convention wraps up in Toronto.

Just between March 7 and 8 at least six companies announced plans to raise at least $10-million in bought-deal financings, while numerous other offerings have either been announced or closed in recent days. The deals may not be at the most opportune share price for many companies, but the volume of deals points at least to a currently vibrant market for offerings.

Extorre Gold Mines (XG-T) has arranged a $25-million bought deal financing at $7.10 per share to advance its Cerro Moro project in Argentina.  The financing comes a little less than a month after Extorre shelved a $50-million bought-deal financing at $9.45 because the British Columbia Securities Commission raised some questions related to scoping study numbers it had included in the prospectus. The company will issue 3.53 million shares in the offering, while it currently has 92.6 million shares outstanding.

Sandspring Resources (SSP-V) has also announced a $25-million bought deal financing, though it plans to issue 23.15 million shares at $1.08 per share. The company continues to make progress at its Toroparu gold project in Guyana, although it is currently trading very close to its 52-week trading low of $1.14. Sandspring hit a 52-week high of $3.54 in March 2011 and has 108.8 million shares outstanding.

Lachlan Star (LSA-T, LSA-A) has cashed in on a strong share price increase with a $17.6-million financing. The company plans to issue 11 million shares at $1.60 each, while on the day it announced the financing its share price hit an all-time high of $1.75. The Australia-based company quietly listed on the TSX in October 2011, but started to garner attention in January and its share price has since taken off. The company controls an operating gold mine in Chile and has 75.4 million shares outstanding.

Stornoway Diamond (SWY-T) has arranged a $15-million financing at a dollar per unit. The units consist of a share and a half-warrant, with full warrants exercisable at $1.20 for 24 months. The company will be putting the money towards its Renard diamond project in northern Quebec, on which it published a feasibility study in early January. In announcing the financing Stornoway noted that it plans to soon complete a second financing of 10 million units with “a significant shareholder of Stornoway and one or more additional institutional investors” at substantially the same terms as the current financing. The company closed at 99¢ on the day the financing was released and has 118.7 million shares outstanding.

Great Basin Gold (GBG-T), struggling to make its sizable Burnstone gold mine profitable, has arranged a $50-million bought deal offering.  The company has arranged to issue 61 million shares at 82¢ each, adding to the 475.7 million shares the company already has outstanding. The financing comes in slightly above the 52-week low of 78¢ the company hit 2 days before announcing the financing, and significantly off the 52-week high of $2.72 it hit in April 2011. Great Basin expects to produce upwards of 200,000 oz. gold this year from its two operating mines in South Africa and Nevada and be cash flow positive at Burnstone by the third quarter.

Northern Graphite (NGC-V), riding a wave of speculation in the commodity, has cashed in with a $10-million offering. The company is issuing 5.9 million shares at $1.70 each, with $7.5 million of the financing to go to an affiliate of the Sprott group of companies and Geologic Resource Partners. Northern Graphite has seen its share price climb from around 90¢ in early January to a 52-week high of $2.16 on March 1 and closing at $2.05 on news of the financing. The company has 38.9 million shares outstanding.

But while many juniors are cashing up, some have been left without. Rio Novo Gold (RN-T), for one, recently announced it would not be proceeding with its $20-million bought deal financing. The company arranged the financing in early February at 75¢ per unit as the company rode a brief share price rebound to 85¢, but the company had slipped down to 55¢ the day before announcing the deal was called off. The company still has over $28 million in cash though and expects to have a preliminary economic assessment on its Almas gold project in Brazil shortly.

And of course many substantial financings were arranged long before the conference, with Anfield Nickel (ANF-V) recently  closing a $22.1-million financing, Trevali Mining (TV-T) closing an $18-million financing, Roxgold (ROG-V) closing a $25.9-million financing, Panoro Minerals (PML-V) closing a $13.8-million financing, Prophecy Coal (PCY-T) closing a $10-million financing, Amarc Resources (AHR-V) closing a $16.3-million financing, Donner Metals (DON-V) closing a $15.2-million financing, and Regulus Resources (REG-V) completing a $26.7-million financing.