Canadian precious metals miner Kinross Gold (TSX:K) has committed C$1.5 million ($1.6 million) to acquiring a 9.9% interest in fellow Canadian explorer Relevant Gold (TSX-V:RGC).
The investment is being done via a private placement, which follows close on the heels of an earlier non-brokered private placement to raise up to C$2.5 million.
The follow-on placement of 5.1 million units to Kinross is being done at a 20% higher buy-in price of C$0.30 per unit, which comprises one common share and a one-half share purchase warrant.
Each whole warrant is exercisable at C$0.35 within two years.
Following completion of the placement, Relevant Gold and Kinross will enter into an Investor Rights Agreement reserving certain rights for Kinross, which has a market value of nearly C$14 billion and is also listed on the New York Stock Exchange (NYSE:KGC).
These rights include pro-rata participation in future financings, the ability to increase ownership to 19.9%, and the formation of a technical advisory committee comprising two Kinross members and two Relevant Gold members.
Relevant Gold CEO Rob Bergmann says the investment by Kinross is a “strong vote of confidence” in the company’s Wyoming exploration strategy and its ability to execute in the field.
“This investment marks a key milestone for Relevant, expanding our technical depth, strengthening our corporate structure and bolstering our treasury,” he says.
The fresh capital injection will be allocated to exploration activities at Relevant Gold’s projects in Wyoming, US.
Relevant Gold, which has a market capitalisation of $21.7 million, has five projects spread across two gold camps covering over 40,000 acres.
The company says its landholding demonstrates “Abitibi-like potential” referring to the Abitibi Greenstone Belt in Canada that extends from Wawa, Ontario to Chibougamau, Québec.
The belt hosts over 120 mines and has produced over 200 million ounces of gold since 1901.
Write to Angela East at Mining.com.au
Images: Relevant Gold
