Centerra backs Dryden Gold with $3.4M for 9.9% stake

Ontario-focused Dryden Gold (TSXV: DRY; USOTC: DRYGF) received a boost on Tuesday after it said Centerra Gold (TSX: CG; NYSE: CGAU) will be taking up a 9.9% equity stake in the company.

Centerra will invest through a $3.4-million private placement by Dryden. The junior plans to issue 14.93 million shares, including nearly 12 million flow-through shares priced at 24¢ each. The rest will be hard-dollar shares priced at 17¢ each.

Dryden Gold’s shares traded at 15¢ apiece in early afternoon, for a 14% intraday gain and a $19.5-million market capitalization. Since the stock was listed earlier this year, it has traded at a peak of 40¢ and a low of 9.5¢.

Proceeds of the financing will be used to advance the company’s exploration initiatives in the Dryden gold district of northwestern Ontario. The junior has so far consolidated a 702-sq.-km land package within the district, including historic gold mines with limited modern exploration. Its three main assets are the brownfield Gold Rock project, and the early-exploration-stage Lower Manitou and Tremblay projects.

‘Validation’

“Centerra is using its strong balance sheet to focus on organic growth through strategic investments and is providing valuable capital to select junior mining companies,” Dryden’s CEO Trey Wasser said in a release. “We look at this investment as a strong validation of our property, our team and the science behind our exploration program.”

According to Dryden, its property package hosts high-grade gold mineralization that stretches over 50 km of strike length along the Manitou-Dinorwic deformation zone. Others that have explored in this region include Kinross Gold (TSX: K; NYSE: KGC), NexGold Mining (TSXV: NEXG; US-OTC: NXGCF) and Kenorland Minerals (TSXV: KLD).

With the Centerra-backed funding, Dryden said it will now be fully financed through 2025 with a $5.8 million exploration budget, plus an additional $2 million to cover other expenses, including a final payment due to Alamos Gold (TSX: AGI; NYSE: AGI) for its purchase of the Manitou property. Alamos is currently a significant shareholder (15%) of the company.