Sprott takes 11.5% stake in Scottie, stock rallies
Scottie Resources Corp. [SCOT-TSXV; SCTSF-OTC] on Friday January 10 announced a $2 million investment by Eric Sprott.
The junior said it has arranged a non-brokered private placement financing with the Bay Street gold bug consisting of 10 million units at 20 cents per unit, a move that will generate $2 million in gross proceeds, money that will be deployed at the Scottie’s British Columbia properties.
Under the terms of the financing, each unit consists of one common share and one common share purchase warrant. Each warrant is exercisable into one common share of Scottie for up to 24 months from the date of closing at 30 cents per share.
Sprott has agreed to purchase 10 million placement units, leaving him with 11.5% of the company’s issued and outstanding shares. If Sprott was to exercise all of the warrants, his stake in the company would rise to 20.6% on a partially diluted basis.
Scottie shares rallied on the news, rising 15.2% or $0.035 to 26.5 cents on active volume of 1.65 million. The shares are currently trading in a 52-week range of $0.08 and 28 cents.
News of Sprott’s strategic investment comes on the heels of impressive drilling results from Scottie’s Bow Property in British Columbia’s Golden Triangle Region. The Bow property is located 2 km northeast of the past-producing Scottie Gold Mine.
The junior said drilling on the Bend vein target on the Bow Property returned 73.32 g/t gold and 71.01 g/t silver over a 4.38 metre-core length in drill hole SR19-11. That included 152.5 g/t gold and 143.56 g/t silver over 1.89 metres.
“These results exemplify the high-grade gold and silver potential of the Bow Property,” Scottie has said.
Scottie is an exploration stage company engaged in the acquisition, exploration and evaluation of gold and silver properties located in the Golden Triangle, an area of northwestern B.C. that ranks among the world’s most mineralized districts.
It is host to past and current mining operations, including Johnny Mountain, Red Mountain, Snip Mine, Premier Mine, Golden Bear and Valley of Kings. Scottie holds a 100% interest in the past-producing Scottie Gold Mine, which operated from 1981 to 1985, producing 95,426 ounces of gold from 183,147 tonnes of mineralization.
The junior has an option to acquire a 100% interest in the 471.92-hectare Bow property, which is contiguous to the former Scottie Mine. Previous exploration work has indicated the existence of 13 different gold-bearing veins on the Bow and Scottie gold properties.
A small drill program in 1985 by Esso (1,091 metres) targeted the Bend vein, where drill results over a 16-metre strike-length interval of the vein returned an average width of 2.0 meters with average grades of 22.7 g/t gold and 67.5 g/t silver. This includes a 4.17-metre true width interval grading 70.65 g/t gold.
Scottie recently completed a 2,050-metre drill program on the Scottie and Bow properties. The 20-hole program included drilling on the Bend Vein, Blueberry Vein and Scottie Gold Mine.
Drilling in 2019 was designed to confirm historical results and expand the known extent of high-grade gold and silver mineralization in the Bend vein. The company integrated the historical data and recent 2018/2019 exploration work into new structural models to better understand the geometry of mineralization.
“The assays from the Bend vein confirm the superb results of previous studies and demonstrate a truly underexplored, high-grade gold and silver target,” said Scottie President and CEO Bradley Rourke. “Past drilling on the Bend vein only probed to a maximum vertical depth of approximately 55 metres,” he said.
“Our drilling this season proves that the mineralized structure extends deeper than previously tested and substantially increased the strike length of the known mineralization.”
Rourke said drilling in 2020 will allow the company to further prove the scale of this structurally-controlled high-grade vein deposit.