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How a Junior Mining Company Notched Funding from a Global Mining Giant

Jocelyn Aspa Jocelyn Aspa, The Market Herald
8 Comments| November 18, 2021

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While 2021 is almost over, junior mining companies are still busy as ever with many ramping up for future exploration activities.

Take Vancouver-based Kenorland Minerals Ltd. (TSX-V: KLD, OTC: NWRCF, Forum), which is a mineral exploration company focused on early to advanced-stage exploration projects in North America. At present, Kenorland has multiple projects under its belt including the Frotet project in Quebec and the Healy project in Alaska.

In November the company announced it had closed a C$5.2 million strategic investment backed by Sumitomo Metal Mining Canada, which will help Kenorland advance exploration on its Frotet project and other projects and partnerships within its exploration portfolio.

Kenorland closes strategic investment with Sumitomo Metal Mining

In the press release, Kenorland Minerals said Sumitomo subscribed for and purchased over 5.2 million shares at $1.00 each for aggregate proceeds of $5.2 million and Sumitomo owning roughly 10 percent of Kenorland’s outstanding common shares.

Approximately 80 percent of the funds — $4.16 million — will be used for exploration expenditures on Kenorland’s properties while the remaining 20 percent — $1.04 million — will be used for general and administrative expenses incurred by the company.

In addition to the strategic investment with Sumitomo, the companies entered into an investor rights agreement that gives Sumitomo certain rights such as appointing one director of Kenorland.

"We are delighted to welcome Sumitomo Metal Mining as a strategic investor in Kenorland," Zach Flood, president and CEO of Kenorland, said in a release. "Sumitomo's investment is a significant milestone for us and represents a strong endorsement of our team, the Frotet Project, and our additional projects and partnerships within the exploration portfolio. We look forward to continued success and building an even stronger relationship with our newest significant shareholder."

Sumitomo will also have the right to participate in future equity issuances to maintain its ownership within the company and will be provided with “piggy-back registration rights.”

A robust portfolio

On the heels of the company’s strategic investment with Sumitomo, Kenorland announced results from its recently completed Phase 2 follow-up geochemical survey at the Chebistuan project in Quebec’s Abitibi greenstone belt.

The company said that a total of 2,121 soil samples were collected for geochemical analysis, while 25 till samples were collected for gold grain analysis. Phase 1 and Phase 2 survey results also outlined multiple gold and pathfinder element anomalies, which will be advanced with upcoming prospecting and detailed geophysical surveys. These will include airborne magnetics, radiometrics, and induced polarization in anticipation for drill targeting.

“This is another step forward and significant development in the systematic exploration of the Chebistuan Project, one of the largest contiguous land packages in Quebec. We've effectively screened over 170,000 hectares of ground in just over a year and we now have discrete target areas which will see detailed follow-up exploration, including prospecting and geophysical surveys this fall,” Flood said in a release.

Kenorland’s Frotet Project spans 39,365 hectares of the Frotet-Evans Archean greenstone belt within the Opatica geological sub-province of Quebec. The property sits next to the past-producing Troilus gold-copper mine and covers several major deformation zones with known orogenic gold prospects and stratigraphy hosting VMS deposits in other regions of the belt.

In Alaska, Kenorland is also advancing its Healy project which contains a range of untested gold targets within an 18,470-hectare land package.

Between the Frotet and Healy projects, the company conducted summer and fall exploration programs at each and is now currently awaiting assay results from each project.

“We are carrying out a significant amount of exploration this year, which is shaping up to be our largest yet in terms of both sole-funded, and partner-funded budgets,” Francis MacDonald, executive vice president of exploration at Kenorland, said in a release. “There is over C$17 million of exploration happening across our portfolio, with the majority of that spend going towards drill programs at the Frotet Project, in Quebec, which is currently under JV with Sumitomo Metal Mining, as well as the Healy Project, in Alaska, which we have optioned from Newmont Corporation.”

The investment angle

Through the backing from Sumitomo Metal Mining, Kenorland Minerals is in a strong position to execute its goals at the Frotet project in addition to other projects in the company’s portfolio.

Headquartered in Tokyo, Japan, Sumitomo, Metal Mining has been around since 1950 and has an extensive portfolio with eight mines and nine smelters and refineries.

In other words, Sumitomo’s financing puts Kenorland in a league above others in the junior mining space by having the funds for future programs — meaning the company is well-financed for the foreseeable future.


FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.


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