Sprott takes 24% stake in TRU Precious Metals, shares rally

Mining financier Eric Sprott has emerged as a major shareholder of TRU Precious Metals Corp. [TRU-TSXV; TRUIF-OTCQB; 706-FSE], a company that is engaged in gold exploration in Newfoundland.

TRU shares rallied on the news, rising 12.7% or $0.04 to 35.5 cents on volume of 493,500. The shares are currently trading in a 52-week range of 52 cents and 12 cents.

A numbered company beneficially-owned by Sprott has purchased 9.09 million units of TRU for 22 cents each for an aggregate consideration of $2 million.

TRU welcomed Sprott as a major shareholder after announcing the completion of a non-brokered private placement that raised gross proceeds of $3.5 million from an offering of 12.9 million flow-through units priced at 27 cents each.

Each flow-through unit consists of one common share of TRU that qualifies as a “flow-through share” under the Income Tax Act of Canada, and one “flow-through” common share purchase warrant. Each flow-through warrant is exercisable into one common share of TRU at 35 cents a share until June 17, 2024.

The units acquired by Sprott were purchased by way of a private agreement with a single vendor.

As a result, he beneficially owns and controls 9.09 million shares and the same number of warrants representing approximately 13.7% of the outstanding shares on a non-diluted basis and approximately 24% on a partially diluted basis assuming exercise of warrants.

Prior to this acquisition, Sprott did not own any securities in the company.

TRU has assembled a portfolio of five gold exploration properties in the highly prospective Central Newfoundland Gold Belt. The company has an option with a subsidiary of Altius Minerals Corp. [ALS-TSX, ATUSF-OTCQX] to purchase 100% of the Golden Rose Project, located along the deposit-bearing Cape Ray-Valentine Lake Shear Zone.

TRU also owns 100% of the Twilite Gold Project, located along the same shear zone, and three under-exploration properties, including its Rolling Pond property bordering New Found Gold Corp.‘s [NFG-TSXV] Queensway Project.

TRU said proceeds of the private placement will be used by the company to fund a two-phase exploration program at the flagship Golden Rose project, and a targeted and recently expanded phase one drilling program at the Twilite Gold project.

Golden Rose lies on strike with Marathon Gold Corp.‘s [MOZ-TSX, OTC-MGDPF] Valentine Gold Project. Where Marathon recently reported a maiden resource estimate for the Berry Zone.

Marathon said it has outlined an inferred resource of 639,000 ounces of gold (11.3 million tonnes at 1.75 g/t). It said 89% of the total estimate is an open pit resource of 566,400 ounces, with the balance associated with underground.