- Canadian billionaire, Eric Sprott has bought just under 10 million flow through shares in Pure Gold Mining (TSXV:PGM) for C$15 million
- Eric purchased the shares at $1.52 per share, a substantial premium compared to Pure Gold’s recent market average
- Pure Gold will use the funds to kickstart work at its Red Lake Gold project,
- Production at Red Lake is expected to begin in the last quarter of this year
- Pure Gold (PGM) is up 0.84 per cent and is trading at $1.21 per share
Canadian billionaire, Eric Sprott has purchased just under 10 million flow through shares in Pure Gold Mining (TSXV:PGM) for C$15 million.
Through the deal, Eric will acquire 9,868,421 shares Pure Gold, at price of $1.52 per share.
That is a substantial premium, considering the company’ share price has hovered around $1.00 for the past 30 days.
Pure Gold has stated it will use this cash boost to advance exploration at the company’s Red Lake gold property.
As the flow-through shares qualify as mining expenditures both the company and the investor will receive tax benefits.
Using flow through shares to offset exploration costs in a common way junior mining companies can outsource expensive exploration programs without incurring heavy taxes.
Eric Sprott said investing in Pure Gold has good potential for return, based on the location, size and grade of the mineral deposit at Red Lake.
“The ultra-high grade hits in the eight zone remind me a lot of the HG Zone that built Goldcorp, as well as SMC at Macassa and the Swan Zone at Fosterville.
“These are the types of discoveries that have the potential to be company makers and tend to lead to a much higher production profile than originally given credit,” he said.
Meanwhile, Darin Labrenz, President and CEO of Pure Gold, believes having Eric as a cornerstone investor and strong partner puts the company in a unique position amongst its peers.
“We are fully funded and on-track to pour our first gold in 2020’s fourth quarter into a record high gold price environment for Canadian producers,” he said.
Pure Gold (PGM) is up 0.84 per cent and is trading at $1.21 per share at 10:01 am EDT.