Medallion Resources (MDL.V) is in the process of completing a C$630,000 placement after upsizing the originally announced placement due to investor demand. The units will be issued at C$0.09, with each unit consisting of one share and half a warrant. Each full warrant will allow the warrant holder to acquire an additional share at C$0.15 for a period of three years from the closing date of the private placement.
CEO Don Lay will subscribe for in excess of 3.1 million shares in this placement after completing a gypsy swap in the previous few weeks. Apparently an interested party wanted to invest a substantial amount in Medallion Resources (almost C$300,000) but wouldn’t be allowed to have the stock in the traditional four month lock-up. This explains the large block trade we saw March 15; CEO Don Lay provided a block of free-trading stock to that buyer and will reinvest the proceeds in the placement as he obviously has no problems with a 4 month hold period.
The cash will be used to continue to work on the metallurgical test program, and fortunately Medallion can also count on government grants to the tune of almost C$85,000 to complete this test work. A first tranche of C$50,000 in grants will be used to cover approximately 60% of the budgeted C$80,000 needed by the Saskatchewan Research Council to analyze the waste streams of the processed monazite (which could contain some radioactive elements like uranium and thorium) and the processing routes. This is a vital part of the company’s business plan as you obviously need to know how to safely dispose of the waste.
A second grant was recently awarded to figure out how to recover the phosphate from the monazite as well. Phosphate could be an interesting by-product of the REE recovery process and if Medallion succeeds in separating a phosphate product that meets the requirements of potential buyers, the phosphate sales could cover a part of the processing cost to recover the REE from the monazite.
This phase of the test work, which is estimated to cost up to C$46,400 and will be conducted by a study group at the University of Toronto, will be funded for 75% by the research grant from the federal government.
And this once again explains why Medallion has been able to continue to work on its flow sheet while raising just minimal amounts of money: in the past 18 months, Medallion raised just C$1.27M (excluding the current placement) and the fact Don Lay and his team know how to navigate the muddy waters to get government grants that cover 60-75% of the expected cost of the studies definitely is a bonus.
Go to Medallion’s website
The author has a long position in Medallion Resources. Medallion is a sponsor of the website. Please read the disclaimer
