Block of gold up for grabs in Matador News26 Jun 2021

Gold miner Matador has enlisted Shaw and Partners and Canaccord Genuity to sell 28.58 million shares at 42¢ per share, worth $12 million.

 

The block trade will follow the completion of a Canadian Flow Through placement of the securities at 56¢, subject to foreign exchange movements.

 

A flow through placement allows resources companies in Canada to issue new shares to investors at a higher price than it would receive for normal shares, allowing it to raise additional funds to support exploration activities thanks to tax incentives.

 

The 42¢ a share deal comes at a 4.5 per cent discount to Matador’s last close price of 44¢ and a 9.9 per cent discount to its five day volume-weighted average price.

 

The offer follows a similar transaction the company completed in July last year.

 

Matador’s Cap Ray Gold Project is in the south-western area of Newfoundland, Canada, extending over 120 kilometres along the Cape Ray shear.

 

Matador will use the proceeds of the offer to accelerate its diamond drilling program from 20,000 metres to 45,000m, as well as up its auger drilling program from three rigs to five.

The funds will also support an inaugural winter exploration program.

 

A scoping study published last year found that the mine had “potentially strong” financial metrics and a possible seven-year lifespan for the initial mine.

 

The company’s trading halt is due to be lifted on Wednesday next week, once confirmation letters regarding the block trade have been distributed.

 

Article source: AFR, 25 June 2021

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