Major Precious Metals Corp. [SIZE-CSE] said Friday it has recently completed a phase one diamond drilling program at its flagship Skaergaard Palladium and Gold Project in eastern Greenland.
The company also said it has struck a definitive convertible security financing agreement with L1 Capital Global Opportunities Master Fund, a Cayman-based investment fund, part of the L1 Capital Group.
Major Precious Metals said the funding will come in the form of up to a $6 million face value convertible debenture. The company will receive net proceeds of up to $5.4 million from the convertible debenture issuance, less applicable closing costs.
Under an agreement, an initial $3.15 million has been funded pursuant to the issuance of an initial convertible debenture with a face value of $3.5 million (first tranche). The agreement also contemplates the issuance of a second convertible debenture for gross proceeds of $2.25 million with a face value of $2.5 million (second tranche) to be completed 180 days after the closing of the first tranche.
In relation to the first tranche, the company has agreed to issue 6.0 million common share purchase warrants exercisable for shares for 60 months at an exercise price of 32.5 cents.
“The net proceeds from this innovative financing with L1 Capital gives further support to our ongoing evaluation of at the Skaergaard Palladium and Gold Project,’’ said Anthony Williams, who was recently named CEO and Chairman of the company’s board of directors.
However, the company said it can offer no assurances that the second tranche will be completed as indicated, or at all.
Williams is the founder and Chairman of Dragon Group, a privately-owned group of companies with interests in international mining finance and project management.
The company says Skaergaard is one of the world’s largest undeveloped gold and palladium resources. It hosts an indicated resource of 5.51 million ounces of palladium equivalent (PdEq) (81.6 million tonnes at 2.1 g/t PdEq) and an inferred resource of 14.4 million ounces of PdEq. (217.3 million tonnes at 2.05 g/t PdEq).
The deposits contain high grade palladium, gold and platinum with potential for vanadium, iron, titanium, and other secondary elements.
The project is located on the east coast of Greenland. So far $16 million has been invested in drilling, metallurgy and studies.
In a progress update, the company said it has completed demobilisation from the site and is now co-ordinating the secure transportation (including meeting all international COVID protocols) of over 11,000 core and channel samples gathered from the summer program to the ALS Global Laboratory in Ireland for assay testing.
The results of this work will determine the next steps needed to demonstrate the full potential for economic extraction of the resources at Skaergaard and will report on further progress pending exact confirmation on timing from the Laboratory.
On October 28, 2021, Major Precious Metals shares closed at 32.5 cents The shares trade in a 52-week range of 75 cents and 21.5 cents.