Quebec-basedDianor Resources Inc. can be added to the growing number of companiesthat have put a standby equity distribution agreement in place. Butunlike the others, Dianor, which has a diamond exploration project inNorthern Ontario, made a little history on the way through.
Dianorhas signed a $30-million deal with New York-based Kodiak Capital GroupLLC. Dianor, formed in 2002, is the first TSX Venture-listed miningexploration company to have such an arrangement.
The deal wassigned this week, more than four months after it was announced. Sincethen, Dianor has been before the regulators seeking the requiredapprovals -- and getting the program tweaked, including whether thebuyer will receive freely traded shares. To access the cash, Dianor mustfirst file a shelf prospectus.
It will access that cash understrict terms and conditions, including minimum prices (5¢), maximumdiscount (10%), maximum amounts (both in terms of a particular drawdownand over a 12-month period), and the term of the agreement (threeyears).
"This is a method of financing that should work well forus because we have upside given that we are undertaking the world's'largest bulk sample for diamonds," said John Ryder, Dianor's Irish-bornpresident, adding he views his Wawa project as unique because itcontains rubies, sapphires and gold. "It is our belief that diamondproduction has peaked and that current world diamond reserves are in thearea of 17 to 20 years," added Ryder, who regards the project as"large-volume and medium-grade."
A standby equity distributionagreement is the latest example of Dianor's fundrasing efforts. Over thepast five years it has sold equity by a slew of different approaches,including private placements either through brokers or directly withinstitutions and flow-through shares. Along the way it has issued a lotof shares: At the end of 2009, it had 211 million shares outstanding;five years earlier, it had 77 million shares outstanding. Since 2002, ithas raised about $46-million, two-thirds of which has been spent atWawa.
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Two recent studies on investor satisfaction withfull-service brokerage firms, both conducted by the same researchcompany, provide some insight into the views of U.S. and Canadian retailinvestors.
- In both cases, RBC Wealth Management (in the UnitedStates) and RBC Dominion Securities (in Canada) were ranked number twoafter J.D. Power and Associates surveyed their clients in the UnitedStates and Canada, respectively. In the survey of 4,460 U.S. clients,RBC was ranked second overall to Edward Jones while in the survey of6,500 Canadian clients, RBC was second overall to Raymond James Ltd. In2009, Raymond James, which runs two brokerage models, one known as theindependent agent and the other known as the traditionalemployee-broker, was also ranked first in a survey of Canadian clients.
- But in terms of overall satisfaction, a measure based on sevenvariables. all the Canadian full-service brokerage firms rank behind MDFinancial/ MD Management Ltd., a full-service brokerage firm that catersto the country's physicians.
- Overall satisfaction is higheramong U.S. clients of U.S. full-service brokers than it is amongCanadian clients of Canadian full-service brokers. And overallsatisfaction among clients is up in both countries -- though by moreamong Canadian clients.
bcritchley@nationalpost.com