- On Friday, billionaire mining investor Eric Sprott picked up 750 debenture units issued by Galleon Gold (TSXV:GGO), a miner developing a gold project in Timmins, Ontario, with demonstrated million-ounce potential
- The C$750,000 investment increases his holdings from 20.8 per cent to 28.3 per cent of outstanding shares on a partially diluted basis
- Galleon Gold is an advanced exploration and development company
- Galleon Gold stock has given back 30.36 per cent year-over-year, but only 2.5 per cent over the past five years
On Friday, billionaire mining investor Eric Sprott picked up 750 debenture units issued by Galleon Gold (TSXV:GGO), a miner developing a gold project in Timmins, Ontario, with demonstrated million-ounce potential.
Each debenture consists of C$1,000 in principal and 3,030 share purchase warrants, with each warrant exercisable to acquire one share for C$0.25 for three years after issuance. Investors will earn a yield of 7.5 per cent over a three-year term, with a two-year redemption option.
Sprott may convert any portion of the principal into Galleon Gold stock priced at C$0.165 per share at any time. Galleon Gold, for its part, may make interest payments in cash or shares at the market price when accrued interest is due.
Prior to the acquisition, he owned 13,624,895 shares representing 20.8 per cent of outstanding shares. After the acquisition, he now owns 13,624,895 shares, C$750,000 in convertible debentures and 2,272,500 warrants, representing 28.3 per cent of outstanding shares on a partially diluted basis.
The C$750,000 investment, tied to Galleon’s most recent private placement, increased Sprott’s common share holdings by approximately 6.2 per cent on a partially diluted basis since the last early warning report.
Why does Eric Sprott hold a substantial position in Galleon Gold?
Sprott is comfortable staking his reputation on Galleon because of its flagship West Cache gold project in Ontario, which houses a mineral resource estimated at 472,000 ounces of gold indicated and 1.08 million ounces of gold inferred, accounting for only 10 per cent of the project’s broader land package.
West Cache boasts a 2022 preliminary economic assessment with attractive economics, including an after-tax net present value of US$240.1 million, average all-in sustaining costs of US$987 per ounce, and an assumed gold price of US$1,700 per ounce, a healthy 26.7 per cent below the price of US$2,320 as of 8:07 am ET.
The company is focused on extracting an 86,500-tonne bulk sample to inform upcoming feasibility studies at the West Cache resource area, while further exploring the largely untapped 10,370-ha land package to add ounces to the project, with soil sampling and geophysical surveys indicating potential gold and base metal targets to the north and south of previously drilled areas.
Management has built numerous mines in the region, drawing on extensive expertise across permitting, geology, and operational experience with large-scale mines, positioning Galleon to realize its immense exploration potential.
About Galleon Gold
Galleon Gold is an advanced exploration and development company focused on its West Cache gold project in Timmins, Ontario. The project is 7 kilometres northeast of Pan American Silver’s Timmins West mine and 14 km southwest of Newmont’s Hollinger mine.
Galleon Gold Corp. stock (TSXV:GGO) last traded at C$0.20 per share. The stock has given back 30.36 per cent year-over-year, but only 2.5 per cent over the past five years.
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