Pinetree loads up on McFaulds Lake juniors

Vancouver — After recently closing a $72-million financing, Toronto-based junior investment and merchant banking firm Pinetree Capital (PNP-T, PNPFF-O) has loaded up on shares of several junior mining companies exploring the McFaulds Lake area in northern Ontario’s James Bay lowlands.

In late October, Pinetree sold 13.75 million units at $5.25 apiece through the brokered deal, with each unit consisting of a share and half a warrant. Warrants are exercisable at $6.50 per share for five years.

With the cash in its coffers, Pinetree added to its investment portfolio, picking up shares in four junior explorers active in the McFaulds Lake camp.

Pinetree bought shares in Noront Resources (NOT-V, NOSOF-O), MacDonald Mines Exploration (BMK-V, MCDMF-O), Temex Resources (TME-V, TMXRF-O) and Probe Mines (PRB-V, PROBF-O).

With its purchase of 720,000 Noront shares, Pinetree boosted its position in the company to just over 8.6 million shares, for a 7.6% interest. Noront remains a market darling following its discovery of nickel, copper and platinum group metals on its Double Eagle property. The drill hits have propelled Noront shares to a high of $7.05 over the past couple months from around 40. The stock recently traded around $5.25 per share.

Pinetree picked up more than 3 million units of MacDonald Mines for 40 apiece. Units consist of a share plus half a warrant, with full warrants exercisable at 50 for two years. If all its warrants were exercised, Pinetree would hold more than 11 million MacDonald Mines shares for about 8% of the company.

As part of the same MacDonald Mines financing, US Gold (UXG-T, UXG-X) CEO and chairman Robert McEwen bought 6 million flow-through units at 40 apiece to hold 8.8% of the company, or about 14.4% if all warrants are exercised.

Pinetree acquired 3 million units of Temex and 2 million units of Probe Mines for substantial positions in both juniors.

Pinetree reports investments primarily in the resource sector — mostly in precious metal, uranium, base metal, and oil and gas companies. As of mid-2007, the finance house reported 509 investments with an estimated fair value of about $809 million.

The stock posts a recent trading level of about $6.75 per share and a 52-week price range of $3.50-16.15.