Electrum to invest $6 million in Constantine
Last updated 5/11/2018 at 4:11am
Constantine Metal Resources Ltd. May 1 said it intends to raise C$10 million through a non-brokered private placement that will include a major strategic investment from Electrum Strategic Opportunities Fund II L.P., an investment fund managed by The Electrum Group LLC.
Altius Minerals Corp. and John Tognetti, a major shareholder and Constantine Metal insider, are also slated to participate in the financing.
"We welcome the Electrum 'family' as a major shareholder, who we have had a long-term association with, and appreciate the significant continued support of John Tognetti and Altius Minerals," said Constantine President and CEO Garfield MacVeigh. "The financing will provide funding for a major 2018 exploration effort at Palmer for which the budget and program will be announced shortly."
The company also plans a 4-for-1 share consolidation prior to closing the financing.
The private placement will involve the issuance of 14.7 million post-consolidation units at C68 cents each, with each unit including one Constantine share and one warrant that entitles the holder to purchase an additional share at C$1.00 for a period of five years.
Electrum Strategic Opportunities Fund has agreed to purchase C$6 million of these units. As a result, Electrum will receive pre-emptive rights on future financings and can nominate up to two directors to Constantine's board.
In recent years Electrum has invested in numerous companies with mineral projects across the North, including Novagold Resources (Alaska); Trilogy Metals (Alaska); International Tower Hill Mines (Alaska); Victoria Gold (Yukon); Nickel Creek Platinum (Yukon); and North Arrow Minerals (Nunavut and Northwest Territories).
With its coming investment in Constantine, Electrum will have a stake in Palmer, a zinc- and copper-rich volcanogenic massive sulfide deposit in Southeast Alaska.
Palmer hosts 8.1 million metric tons of inferred resource grading 1.41 percent copper, 5.25 percent zinc, 0.32 grams per metric ton gold and 31.7 g/t silver, according to a resource calculated in 2015.
This low-sulfide VMS deposit also contains 22 to 25 percent barite by weight.
Last year, Constantine and its joint venture partner Dowa Metals & Mining Co. Ltd. expanded the Palmer resource footprint and made a high-grade silver discovery about 3,000 meters south of the deposit.
Some of the money raised through the planned financing would fund Constantine's 51 percent share of a 2018 exploration program that is expected to include further exploration drilling on VMS targets across the Palmer property.
Constantine also plans to spin out its gold assets in Ontario and Yukon this year. The company said this will provide an opportunity to acquire significant additional assets and advance its high-grade gold projects in Ontario's Timmins district, including the Munro Croesus and Golden Mile properties.