Contact Gold (C.V) hasn’t seen the uplift we expected to see upon announcing its joint venture agreement with Centerra Gold (CG.TO, CGAU) on the Green Springs project, and unfortunately this means the company’s private placement had to be priced at just C$0.02 per share. Contact initially aimed to raise C$650,000 by issuing 32.5M units at that price with each unit consisting of one common share and a full warrant with an exercise price of C$0.05 valid for a period of three years. Due to investor interest, the offering was upsized to C$1M (50 million units). As Centerra Gold is spending its cash on Green Springs as part of its earn-in commitment, the funds raised by Contact Gold will be spent on G&A and some work on its fully owned Pony Creek gold project, located right next door to Orla Mining’s (OLA.TO, ORLA) Railroad project.
Contact isn’t the only company trying to raise money. Alpha Exploration (ALEX.V) has kicked off a C$5M financing campaign priced at C$0.70 per unit. Each unit consists of one common share and a full warrant, allowing the warrant holder to acquire an additional share at C$1.05 during a period of 24 months.
This placement doesn’t come as a surprise as we already reported on Alpha’s ambition to complete a 15,000 meter drill program on the Aburna gold project where Alpha recently pulled exceptional gold grades out of the ground over pretty thick widths.
Disclosure: The author has a long position in Contact Gold and Alpha Exploration. Both companies are a sponsor of the website. Please read our disclaimer.
