Tectonic Metals Inc. [TECT-TSXV] has announced a $6 million private placement financing with a strategic investment by Crescat Capital to fund the inaugural 2023 drilling of its company’s Flat Gold Project.
Tectonic has described the project as an intrusion-hosted, bulk tonnage gold system located in southwestern Alaska, and 40 kilometres north of the Donlin Gold Project, owned equally by Barrick Gold Corp. [ABX-TSX, GOLD-NYSE] and Novagold Resources Inc. [NG-TSX, NYSE American].
The company said it has struck a deal with a syndicate of agents in connection with a private placement of units priced at 11 cents, for gross proceeds of up to $6 million. It said the offering has been structured to take advantage of the LIFE exemption whereby common shares issued under the exemption will be freely tradeable listed equity securities not subject to any hold period.
Crescat Capital, Tectonic’s largest shareholder with a 19.56% stake, will be participating in the offering under a pre-emptive right, granted to them by Tectonic. Crescat is a global macro asset management firm headquartered in Denver, Colo.
Each unit will consist of one common share and one-half of a common share purchase warrant. Each warrant will entitle the holder to buy one common share for 24 months after the closing date of the offering at an exercise price of 15 cents.
The units to be issued under the offering will be offered under (i) the listed issuer financing exemption under Part 5A of National Instrument 45-106 – Prospectus Exemptions for gross proceeds of $5 million in all Canadian provinces except Quebec, and (ii) the accredited investor exemption under NI 45-106 for the balance of the offering.
Details of the financing were announced after the close of trading on May 9, 2023, when Tectonic shares closed at 12.5 cents. The shares have been trading in a 52-week range of 20 cents and $0.04.
Tectonic is a mineral exploration company created and operated by officials who were previously involved with Kaminak Gold Corp., the company that raised $165 million to fund the acquisition, discovery and advancement of the Coffee Gold Project, a Yukon discovery that was sold to the company formerly known as Goldcorp Inc. (now Newmont Corp., [NGT-TSX, NEM-NYSE]) for $520 million in 2016.
Flat consists of 92,000 acres of Doyon lands and represents a district-scale opportunity, Tectonic has said. The property boasts consistent gold mineralization in intrusive-hosted, sheeted quartz veins structurally similar to the Fort Knox and Eagle gold mines of Kinross Gold Corp. (K-TSX, KGC-NYSE) and Victoria Gold Corp. [VGCX-TSX] respectively, with multiple near-surface targets untested. It said the project hosts the potential for both blind and buried mineralization and high-grade veining.