Junior miners and explorers cashing up

Junior explorers launched substantial financings when the networking-heavy Prospectors & Developers Association of Canada convention wrapped up in Toronto.

Between March 7 and 8 at least six companies announced plans to raise $10 million in bought-deal financings, while numerous offerings have since either been announced or closed. The deals may not be at the most opportune share price for many companies, but the volume of deals points to a 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 after the British Columbia Securities Commission raised questions related to scoping study numbers included in the prospectus. The company will issue 3.53 million shares in the offering, while it has 92.6 million shares outstanding.

Sandspring Resources (SSP-V) has also announced a $25-million bought-deal financing, but it plans to issue 23.15 million shares at $1.08 per share. The company is making progress at its Toroparu gold project in Guyana, although it trades 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) has cashed in on strong share prices 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 garnered 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 anticipates putting the money towards its Renard diamond project in northern Quebec, which it published a feasibility study for in early January. Stornoway noted 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.

Struggling to make its sizeable Burnstone gold mine profitable, Great Basin Gold (GBG-T) has arranged a $50-million bought-deal offering. The company had originally hoped to issue 61 million shares at 82¢ each, but a drop in its share price led to a 75¢ re-pricing of the offering and added 5.7 million units to keep the $50-million total. The financing will add to the 475.7 million shares the company already has outstanding, while Great Basin dropped to a new 52-week low of 67¢ on the news. Great Basin expects to produce 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) is  riding a wave of  new interests in graphite and 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 going to an affiliate of the Sprott Group of Companies and Geologic Resource Partners. Northern Graphite has seen its share price climb from 90¢ in early January to a 52-week high of $2.16 on March 1, 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 has over $28 million in cash and is expecting a preliminary economic assessment on its Almas gold project in Brazil.

Substantial financings were arranged long before the conference, with Anfield Nickel (ANF-V) 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) wrapping up a $26.7-million financing.