Centerra Gold takes 9.9% stake in Kenorland Minerals
Kenorland Minerals Ltd. [KLD-TSXV, 3WQ0] said it has arranged a strategic investment by Centerra Gold Inc. [CG-TSX, CGAU-OTC] through a $9.86 million non-brokered private placement. The investment will leave Centerra with a 9.9% stake in Kenorland, which saw its share price jump 8.0% or $0.06 to 81 cents in early trading, Tuesday. The shares trade in a 52-week range of 89 cents and 57 cents.
Kenorland said the private placement will consist of 8.3 million common shares that will qualify as “flow-through shares” under the Income Tax Act (Canada) and be sold on a charitable flow-through basis.
Proceeds will be used to advance exploration at Kenorland’s Canadian projects in Quebec, Ontario, Manitoba, British Columbia and Saskatchewan.
Under the terms of the offering, Kenorland will issue 6.2 million flow-through shares (the National FT shares) priced at $1.12 per National FT share, which shall be issued as traditional flow-through shares.
It will also issue 1.4 million flow-through shares (the QC flow-through shares) priced at $1.42 per share to Quebec resident subscribers with additional enhancements provided under the Quebec Taxation Act.
As well, it will issue 694,445 flow-through shares (the MB flow-through shares) priced at $1.29 to Manitoba resident subscribers.
Total proceeds are expected to be $9.86 million, based on an average price of $1.186 per flow-through share. The offering is expected to close by May 28, 2024.
“We area very excited to welcome Centerra as a new strategic investor in Kenorland,’’ said Kenorland President and CEO Zach Flood. “Centerra’s strong balance sheet and focus on organic growth through exploration aligns well with our generative strategy,’’ he said.
“Having partnered with Centerra on the Hunter Project, Quebec, since 2022, we look forward to continuing to build on this relationship as we expand our exploration footprint in North America.’’
Centerra operates two mines including Mount Milligan and the Oksut Mine in Turkey. It also owns the Goldfield District Project in Nevada, the Kemess Underground Project in B.C. and the Molybdenum Business Unit in the U.S. and Canada.
Centerra said it produced 350,317 ounces of gold in 2023, which was near the midpoint of its 2023 gold production guidance range of between 340,000 and 360,000 ounces. That included 129,259 ounces in the fourth quarter of 2023.
Meanwhile, Sumitomo Metal Mining Canada Ltd. has issued a notice of its intent to exercise its equity participation right granted in an investor rights agreement dated November 2, 2021, in order to maintain its 10.1% interest in the company.
Kenorland holds a 4.0% net smelter return royalty on the Frotet Project in Quebec which is owned by Sumitomo Metals. The Frotet Project hosts the Regnault gold system, a greenfields discovery made by Kenorland and Sumitomo in 2020.
The Frotet project covers 39,365 hectares of the Frotet greenstone belt, which hosts the Troilus gold-copper mine.