Lode Gold (LOD.V / SBMIF) and Fancamp Exploration (FNC.V / FNCJF) Strategic Transaction
Lode Gold Signs $3.5 Million Strategic Alliance; Creating One of the Largest Prospective Land Packages in New Brunswick
Fancamp Announces Transaction with Lode Gold Resources to Advance New Brunswick and Yukon Mineral Properties
The deal consists of a couple of transactions in a defined sequence of events:
1. Fancamp investment in Lode Gold: $500,000 for 14,285,714 special warrants (“Lode Gold Special Warrants”) on a private placement basis, at an issue price of $0.035 per Lode Gold Special Warrant. Each special warrant, upon completion of the Spin Out [of Gold Orogen / Spin Co], will convert to one common share of Lode Gold and one 5-year Lode Gold share purchase warrant with an exercise price of $0.05 per share. If fully exercised, the warrant subscription proceeds will total an additional $714,286;
[Check terms of Warrants in relation to conversion in consolidation transactions ?]
2. Lode Gold Spinout of Gold Orogen: Gold Orogen will be a Yukon focused explorer. "Lode Gold will transfer to Spin Co, Gold Orogen, both its Golden Culvert mineral property located in Selwyn Basin, Tombstone Belt, southeastern Yukon, and its nearby Win mineral property located in the Tombstone Belt, southeastern Yukon." "Lode Gold will undertake a spin-out transaction of Spin Co (the “Spin Out”) pursuant to which each shareholder of Lode Gold will receive Spin Co shares for each common share of Lode Gold (each, a “Lode Gold Share”) held on the effective date of the Spin Out, whereby Spin Co will become a reporting issuer".
3. Conditional Spinout Terms: Lode Gold will "Complete the Spin Out and list [Gold Orogen] in a Canadian stock exchange and raise an aggregate of $1,500,000 by March 31, 2025". "In the case the Spin Out is not completed by March 31, 2025", or "if Gold Orogen is unable to raise in part or whole the aggregate of $1,500,000" by March 31, 2025, then, "the special warrants will automatically convert and Lode Gold will issue to Fancamp an additional 10% [~1,428,571 shares ?] of the Lode Gold shares and Lode Gold warrants to be issued on conversion of the special warrants."
Not a condition of the deal, but practical... and previously approved back in July... Lode Gold will reverse 1 for 10 prior to the Spin... reducing shares from 378 million to a more workable 38 million... also likely making the math on the spin a bit more linear.
4. Fancamp investment in Gold Orogen: "Fancamp will invest $2,500,000 into Spin Co (the “Fancamp Investment”) in exchange for such number of common shares of Spin Co (“Spin Co Shares”) as is equal to 19.9% of the outstanding Spin Co Shares on an undiluted basis, after completion of the Spin Out (defined below). A portion of the Fancamp Investment will be completed through an indirect flow through offering by Spin Co which result in Spin Co receiving approximately $3,000,000 in proceeds". Immediately after completion of the Spin Out, Fancamp will hold 19.9% of the issued and outstanding shares of Spin Co (before taking into consideration any financings completed by Spin Co in excess of the $1,500,000). For so long as Spin Co holds at least 10% of the issued and outstanding shares of Spin Co, Fancamp will have the right to: (i) nominate a Director for election to the Board of Spin Co; and (ii) participate in any further financings of Spin Co to allow it to maintain its interest in Spin Co".
Gold Orogen will be funded with a total of $4.5 million from Lode Gold/Gold Orogen raising $1.5 million in the Spin, with Fancamp also investing $2.5 million of a planned $3 million raise. The transaction as contemplated values the fully funded Gold Orogen at $12.5 million... with ~23.7% owned by Fancamp, and 76.3% held by Lode Gold / Gold Orogen, and, post-spin, by the (new and old) Lode Gold shareholders other than Fancamp. Lode Gold's (or current shareholders) portion... valued at $9.54 million... vs a current market cap of $11.34 million. Notably, the $1.5 million raise is dilutive of Gold Orogen... not Lode Gold.
5. Gold Orogen / Fancamp Joint Venture: "Lode Gold will transfer all of its interests in its McIntyre Brook mineral property located in New Brunswick (the “McIntyre Brook Property”) and Fancamp will transfer all of its interests in the Riley Brook mineral property located in New Brunswick (the “Riley Brook Property”) to a newly incorporated joint-venture entity (“JV Co”) in which Fancamp and Spin Co will each own 50% of the outstanding shares (the “JV Co Shares”), and for which Fancamp will be the Operator".
Gold Origin will focus on Yukon.... seen here in the regional context, on trend with Snowline, and tucked in neatly between Seabridge's (ex Golden Predator's) 3 Aces project, and Rackla's Rak and Flat projects:
The JV with Fancamp as operator will focus on New Brunswick... seen here in regional context:
Lode Gold will focus on California... in a context all its own... per usual.
[I was expecting Lode Gold might try to combine with Puma... and it might still make sense for Puma to combine with the JV... But, in terms of partners, having Fancamp as the operator of the JV is vastly better for the JV, Gold Orogen, and Lode Gold. Their contribution to the JV was acquired, or announced, two months ago... as they acquired it by staking. They own an active zinc mine... sport a P/E of 5... and with no debt have $28 million in the bank... with the proven ability to raise more... and "many irons in the fire".
I don't see it listed on their project pages... but in announcing departure of a director, they note: "The Corporation wishes him well in his other endeavours and will continue working with Mr. Ferron as we jointly advance the [now mostly consolidated] Shining Tree Joint Venturein South Timmins with PTX Metals Inc.[PANXF], of which Mr. Ferron is the President and CEO". FWIW, they now own the southern extensions along the fault structures I was looking at closely "back in the day"... now worth looking at, again ?]
6. Gold Orogen Exploration Funding: Of the $4.5 million [to be] raised, $3.42 million will be allocated to exploration as: "An aggregate amount of approximately $ 1.86 million will be allocated for [funding Gold Orogen's half of the ?] exploration activities for the New Brunswick JV and approximately $1.56 million will be allocated for exploration activities in Yukon. [Rackla raised $4.65 million to fund exploration in 2024.]
7. Lode Gold retains 100% ownership of 3,351 acres of 100% owned private land in Mariposa, California... five square miles of property, near Agua Fria... that is the remnant core of the original 44,387-acre Fremont Ranch... Las Mariposas... along with the mineral rights, and the Fremont Gold project.
This from six years ago...
This from one hundred sixty six years ago...
Lots of history... some of it well documented...
But still shockingly little effort, regionally, has been applied using modern exploration techniques to put the volume of the historical mining efforts in modern geological context with a high enough resolution to have it be useful...
Enough on this one today... |
