It has been roughly six years since the crash of global commodities and though the top mining companies have been seeing a rebound, many junior and exploration operators are still facing challenges with securing project investment.
When a junior does score a major investment, this support puts it on the path to move forward ahead of its competition.
This is what is going on with KORE Mining Ltd. (TSX: V.KORE, OTCQB: ERKAF, Forum) ,a junior gold mining Company with advanced-stage gold projects in California and British Columbia.
KOREannounced in August 2019 a $3 million non-brokered private placement consisting of 10 million shares at $0.30 per share.
The entire private placement is being fully subscribed and invested into by Canadian billionaire businessman Eric Sprott, who will hold 11.3% of the Company on a non-diluted basis once financing is fully complete. He has made recent industrial investments ranging from $25 million into Continental Gold (TSX:CNL) and $470,000 into Stuhini Exploration Ltd. (TSX:V.STU).
“The investment by Mr. Sprott is a strong endorsement for KORE’s portfolio of advanced gold assets.” - Scott Trebilcock, KORE President and CEO.
The net proceeds of the Eric Sprott financing are expected to fund work across KORE’s fully owned gold exploration portfolio:
- Imperial – Feasibility-stage gold oxide opportunity ready for advancement.
- Gold Creek - A well mineralized region that hosts a wide variety of deposit types in BC
- FG Gold - High and low-grade gold ribbon veins in an orogenic setting in BC - NI 43-101 report
KORE’s business has seen a healthy flow of financing this year. In
May 2019 , the Company raised $4 million from Macquarie Bank Ltd. to move ahead with permitting of the Imperial oxide gold project in California.
The route that KORE has taken to secure sources of financing has been hailed by industry experts as the ideal way to drive projects and extrapolate resource potential.
Industry law firm Fieldfisher covered this back in March 2019 with its report -
"Alternative Financing 2.0: The Next Phase of Mining Funding?" - an analysis on the industry and the top value in private equity financing. Offering cash in return for minority stakes in projects (with the intent to sell a stake for a profit) has proven to be mutually beneficial, and Eric Sprott clearly knows an operation with deep potential when he sees it.
The report notes that this type of financing would be beneficial for KORE’s endeavours:
“The upside is that these alternative finance providers can move very quickly, their unique selling point is they will tie companies up with looser governance and restrictions than the banks and move quicker.”
Each of the Company’s development projects each hold the potential to host near-surface, open pit, heap leachable gold deposits. There is strong potential for discovery in an established mining district here among the Company’s exploration projects.
Securing solid financing has meant KORE Mining can mitigate the technical risk and enhance the high advancement potential of its gold projects. Investors will want to do their own due diligence into this junior as it builds its solid foundation of finance.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.