New Funds To Advance Western Australian Projects
Platina Resources Limited (ASX: PGM) says it is now well funded for a major gold exploration campaign after completing a A$13.7 million sale of its Skaergaard gold and palladium project in Greenland to Canadian-listed Major Precious Metals Corp.
Platina has received C$0.5 million in cash (A$0.52 million) and 55 million Major shares, which based on the last traded price of C$0.23c per share, represents a further C$12.65 million (A$13.2 million) in value for Platina shareholders. Platina will become a major shareholder in Major and has a right to a seat on the company’s board.
Managing Director, Corey Nolan, said the funds would primarily be used to advance Platina’s projects in Western Australia.
“The deal allows us to ramp up exploration activities at our Challa Gold Project which lies in-between the prolific Mt Magnet and Sandstone gold districts in Western Australia,” Mr Nolan said.
“In addition to the cash funds, our Major shares can be sold over me to fund our activities, reducing the need to raise new equity and avoiding the dilution of our share capital.
“A large reconnaissance soil geochemistry program has just been completed at Challa to identify potential targets for deeper drilling.
“The company is also reviewing a number of merger and acquisition opportunities to build its gold presence,” he said.
Mr Nolan added that Platina shareholders would also participate In Major’s prospective value increase.
“Major are already working hard to create value from the project including plans to produce a Mineral Resource Estimate and Preliminary Economic Assessment in accordance with Canadian NI 43-101 Standards, and a drilling programme for summer 2021,” Mr Nolan said.
“The anticipated outcomes of the studies are expected to be positively impacted by the recent strength and positive price outlooks for palladium and gold.”
He noted that palladium was currently trading above US$2,400 per ounce after reaching a high of US$2,875/oz in February while gold was trading at US$1,786/oz following record highs of US$2,067/oz in August.
“When Wardell Armstrong completed the Skaergaard Mineral Resource estimate in 2013 they used a palladium price of US$560/oz and a gold price of US$1,400/oz,” Mr Nolan said.
Platina’s shareholding in Major will be subject to a 24 month me release pooling arrangement, during which me they may not be transferred, assigned, pledged or otherwise traded. The shares will be released from the pooling arrangement in four equal tranches, with the first release after six months, and each subsequent release occurring every six months thereafter.
Subject to a mandatory four month period escrow period (which completes 28 February 2021), there are provisions for accelerated share releases in connection with share price performance, changes in corporate structure or the distribution of the shares to the shareholders of Platina.
