VANCOUVER, B.C. – Raising money ain’t easy for small prospectors, even with the accelerated interest in commodities.
“We’re market dependent. We know we have to go to the market (for money,” says Craig Schneider of Corex Gold Corp. (TSX: V.CGE, Stock Forum), a Mexico prospector with a $22 million stock market worth. But this is no bull market for explorers of our size and timeline.”
Corex has 8,000 hectares of property in the state of Sonora down in Mexico. Geologist Bruno Barde already has overseen 9,000 meters of drilling – some 70 holes. He likes the chances of a large copper-gold porphyry system.
“I am hoping the pure exploration companies like us get discovered by the market,” Mr. Barde says. To Corex’s credit, Gammon Gold Inc. (TSX: T.GAM, Stock Forum), another Mexico miner, took part in a recent financing, a private placement of equity.
But the clock is ticking even with $4.5 million in the bank. Corex hopes to raise cash that will take it across another 20,000 meters for a total cost of $8 million. A number of already sunk holes have shown gold-equivalent graded of 0.9 grams per tonne and better. “We like the breccias, broad and oxidized,” Barde, VP of exploration, says.
Craig Schneider says he will be on the road “marketing” the next six months” to get more cash – almost certainly through a private placement.
Short form offerings
Some Canada prospectors coming out of the gate with new offerings or private placements try a TSX short-form offering. “These are for companies that want to go to many hundreds of investors for $5,000 or $10,000 each,” says David Kearnes, a broker at Canaccord in Vancouver, B.C.
It is called short-form because the prospectus is much shorter than those required for other public offerings of equity in Canada. Lately, Batero Gold Corp. (TSX: V.BAT, Stock Forum), a Colombia prospector, has used it to good and some say excellent advantage.
Avalon Rare Metals (TSX: T.AVL, Stock Forum) recently announced a short-form offering. There are quite a few out there in the land of Canada-traded prospectors.
Mr. Kearnes at Canaccord says he expects a growing number of prospectors to use the short-form financings to reach out to individual shareholders. “Every company should have at least 1,000 shareholders and maybe 2,000. You bring in a fresh audience for your projects and there is liquidity,” he says. Short-form shares trade almost immediately vs. the four-month average hold for institutional and qualified-person placements of equity.
Mr. Kearnes and Canaccord are hosting an evening conference Oct. 14 at the Pan Pacific Hotel in Vancouver. The session will focus on three companies – Copper Mountain Mining Corp. (TSX: T.CUM, Stock Forum), Timmins Gold Corp. (TSX: V.TMM, Stock Forum) and United Mining Group Inc. (TSX: T.UMG, Stock Forum). Still, I am sure David Kearnes will take questions from ordinary folks about short-form offerings. More at his web site, www.davidkearnes.com.
For more coverage of Mexico, Colombia and elsewhere, please view Thom Calandra’s Stockhouse articles.
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