New Age jumps 37% on Sprott financing news

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New Age Metals Inc. [NAM-TSXV, NMTLF-OTC, P7J-FSE] shares rallied sharply in active trading Wednesday after the company said financier Eric Sprott, through an Ontario numbered corporation, has emerged as the new control person of the company.

The move has been approved by 97.85% of New Age’s disinterested shareholders, the company said in a press release.

New Age also said it has now completed the second tranche of its private placement, raising additional proceeds of $2.07 million, having issued 12.9 million units at 16 cents per unit.

Each unit consisted of once common share and one half of one share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share for 20 cents at any time up to August 25, 2023.

All of the units were acquired by Sprott’s numbered corporation. As a result, the financier now controls 51.5 million common shares and 32.7 million warrants, representing 24.5% of the company on a non-diluted basis and 34.7% on a diluted basis.

Sprott had previously held 38.5 million common shares and 26.3 million warrants.

New Age shares rallied on the news, rising 37% or $0.035 to 13 cents on volume of 2.3 million. The shares are currently trading in a 52-week range of 23.5 cents and $0.055.

New Age said the primary use of the financing proceeds will be for the completion of a pre-feasibility study and additional exploration at the company’s flagship River Valley Platinum Group Metals Project in northern Ontario.

River Valley ranks as one of North America’s largest undeveloped primary palladium projects.

It hosts a measured and indicated pit-constrained resource of 99.2 million tonnes of 0.52 g/t palladium, 0.20 g/t platinum, 0.009 g/t rhodium, 0.03 g/t gold, 0.06% copper, 0.02% nickel, 0.006% cobalt or 0.90 g/t palladium equivalent.

That adds up to a measured and indicated resource of almost 2.4 million ounces of platinum group metals or 2.87 million palladium equivalent ounces.

New Age said River Valley PGM has excellent infrastructure and is located within 100 kilometres of the Sudbury Metallurgical Complex. The project area is linked to Sudbury by a network of all-weather highways, roads, and rail beds and is accessible year-round with hydro grid and natural gas power nearby.

A preliminary economic assessment (PEA) announced in June 2019 envisages a life of mine of 14 years, with six million tonnes annually of potential process plant feed at an average grade of 0.99 g/t Palladium. Pre-production capital requirements would be $495 million.

The PEA forsees life of mine operating cash costs of US$709 per ounce and all-in-sustaining cash costs of US$709 per ounce.


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