Freeman Gold (FMAN.C) has expanded the Lemhi gold project with the acquisition of the Moon claims, two claims located within the historical resource area of the project. These pieces of land are located in the northern area of the resource area and according to the company, the Moon claims are in the immediate vicinity of three drill holes which encountered thick intervals of high-grade gold (for oxide zones) with grades exceeding 1 g/t and in some cases reaching values of up to 4 g/t gold, as you can see below.
Last month, Freeman also completed a deal with Yamana Gold whereby the latter has sold its back-in right on the Lemhi gold project in return for 4.04 million shares of Freeman Gold, making Yamana Gold a 5% shareholder. Meanwhile the drill program is ongoing and we hope to see assay results later this month.
Freeman’s share price continues to trade above C$0.50 which is probably as good as it gets in the near-term as the C$0.50 placement completed earlier and the release of the escrowed shares will continue to have an impact on the share price. According to our calculations, an initial 9.4M shares have been released from escrow (5.9M shares that were issued to the numbered company and 3.5M finders shares) with the next important date being October 16th where an additional 7.6M shares will be released from escrow.
In our initial report we weren’t too confident about the impact of those shares, but considering Freeman’s share price is consistently remaining above C$0.50, it does look like those who want to sell are doing so in an orderly fashion. Since September 1st, about 5.5M shares were sold through Anonymous, which represents approximately 57% of all sales. And in the past 6 months (starting on April 16th, when the first batch of shares was released from escrow), a total of 24M shares has been sold through anonymous. Of course, clearly not all Anonymous sales are related to the escrowed shares, but we find it encouraging the market has been able to absorb all the selling. And once the assay results of the Lemhi drill program start coming in, the story may attract new buyers to deal with the remainder.
Disclosure: The author has a long position in Freeman Gold. Freeman is a sponsor of the website.
