Precore Gold has closed an oversubscribed C$6 million non-brokered private placement, providing additional capital for exploration programs and general working capital.
The company issued 30 million units at C$0.20 per unit for gross proceeds of C$6 million.
Precore said the offering was fully allocated and oversubscribed but decided not to increase its size.
Each unit consists of one common share and one-half of one common share purchase warrant.
Each full warrant allows the holder to purchase an additional common share at C$0.28 until September 3, 2028.
The warrants include an acceleration provision allowing Precore to move up the expiration date if its shares trade above a 30-day volume-weighted average price of C$0.70.
Precore intends to use proceeds from the financing to fund exploration and for general working capital.
Argonaut Securities and its clients invested C$4 million as cornerstone participants, representing two-thirds of the offering.
Argonaut Corporate Finance also acted as financial advisor to Precore in connection with the financing.
Argonaut received a C$240,000 cash fee related to subscribers it sourced and 1.2 million finder warrants exercisable at C$0.28 until September 3, 2028.
Under a separate advisory engagement, Argonaut is entitled to a C$5,000 monthly fee for an initial 12-month term and 1.5 million options exercisable at C$0.28 for two years.
Certain Precore directors and officers subscribed for 670,000 units for C$134,000.
Precore is focused on its flagship Arikepay property in Arequipa, Peru, as well as the Lac Big-Rush property in Chibougamau, Quebec.
KEY QUOTES:
“The response to this financing has been exceptional and, in our view, speaks directly to the growing recognition of the discovery potential of our asset portfolio, especially our flagship, the Arikepay Project in Peru. Demand was overwhelming; however, we made a deliberate decision not to upsize the Offering at these levels and unnecessarily dilute our existing shareholders. That decision has become even more meaningful given that Precore Gold’s share price has gained significant value since the announcement. We would like to thank the team at Argonaut for their vision and belief in our management and the potential of the assets and we look forward to their collaboration going forward. We are particularly pleased with the caliber of investors participating in this first significant capital raise, which includes well-known, high-performing, visionary funds and institutional investors from outside the Americas. Their participation significantly broadens our shareholder base and introduces Precore Gold to sophisticated resource investors globally. With a strengthened treasury and a significantly expanded institutional shareholder interest, Precore Gold is entering an important new phase. We are confident that as systematic modern exploration gets underway and we begin to demonstrate the broader potential of our assets, Precore Gold has the opportunity to undergo a meaningful rerating. We look forward to commencing our preliminary and complementary exploration programs in the coming weeks.”
Paul A. Dumas, Executive Chairman of Precore Gold
“Argonaut is delighted to be cornerstoning the Offering and accepting the advisory engagement. An in-house technical review by our geologist indicates the Arikepay Project has the potential to host a significant gold resource. We rarely see intercepts of 81m @ ~3g/t gold. We are excited to see a systematic drill-out of historical gold intercepts which were never followed up given the focus on copper at the time.”
Rob Telford, Director of Equity Capital Markets at Argonaut
