Palladium One cashes in on record high price

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Palladium One Mining Inc. [PDM-TSXV; 7N11] said Friday November 22 that it expects to take advantage of a record high palladium price by closing an over-subscribed $3.8 million non-brokered private placement by November 29, 2019.

Palladium One is a platinum-group elements, nickel, copper exploration and development company. Its assets consist of the palladium dominant Lantinen Koillisma  (LK) PGE-Cu-Ni project in north-central Finland and the Tyko Ni-Cu-PGE property near Marathon, Ontario.

Private placement proceeds are earmarked for the Finland project.

The Kaukua deposit of the LK project hosts 635,600 palladium-equivalent ounces of Indicated Resources, grading 1.80 g/t palladium equivalent, containing 11 million tonnes at 0.81 g/t palladium, 0.27 g/t platinum, 0.09 g/t gold (1.17 g/t palladium-equivalent) 0.15% copper and 0.09% nickel.

On top of that is 525,800 palladium equivalent ounces of Inferred Resources grading 1.50 g/t palladium equivalent, contained in 11 million tonnes at 0.6 g/t palladium, 0.20 g/t platinum, 0.08 g/t gold (0.92 g/t palladium-equivalent), 0.13% copper and 0.08% nickel.

The company says Kaukua is open for expansion, while the Kaukua South, Murtolampi and Haukaiho mineralized zones require systematic exploration via diamond drilling to follow up mineralized drill intercepts.

The Tyko Project is an early stage, high sulphide tenor, nickel focused project with recent drill hole intercepts returning up to 1.06% nickel over 6.22 metres, including 4.71% nickel over 0.87 metres in drill hole TK-16-010.

In an October 28, 2019 press release, Palladium One said it was originally hoping to raise $3.2 million from the private placement financing. The company said Bay Street financier Eric Sprott was expected to subscribe for $1.09 million (18.2 million) offering units, an amount that would have represented 34.1% of the original offering, leaving him with a 19.9% stake in the company.

“We are delighted to announce this offering as proceeds will allow us to focus on increasing our existing mineral resources at our LK Project through new discoveries, and step-out and infill drilling, along the 38-km basal contact corridor,” said Palladium One President and CEO Derrick Weyrauch.

News of the financing came on the same day that palladium hit a record price of US$1,808 an ounce. Weyrauch said this was due to supply deficits and as a direct consequence of higher demand from stricter auto emission standards, and the migration away from diesel powered automobile.

He said that makes Palladium One well positioned as a strategic metal provider for cleaner air.

Palladium One said the offering was originally scheduled to consist of 53.3 million units at $0.06 per units, raising gross proceeds of up to $3.2 million with an over-allotment allocation of up to 15% of the total offering.

However, on November 6, 2019, the company said it was increasing the size of the offering to 62.9 million units, raising the total gross proceeds to $3.8 million at price of $0.06 per unit. It added that Sprott was expected to take up 20 million units worth $1.2 million, representing 31.7% of the offering.

Assuming the offering is fully subscribed, Sprott’s ownership interest in the issued and outstanding common shares of the company is expected to be 19.3% on a non-diluted basis.

On Friday, Palladium One shares rose 6.7% or $0.05 to $0.08. The shares are currently trading in a 52-week range of $0.04 and 15 cents.

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