Global Minerals Raises $11.5 million – Great News for Esperanza Resources

The hoisting mechanism at Strieborná

The hoisting mechanism at Strieborná to get people and equipment up and down the 250 metres deep shaft has been fully restored.

Global Minerals Ltd. (CTG) raised $11.5 million through a non-brokered private placement. The proceeds will be used to complete the rehabilitation of the Maria Mine, which provides access to the Strieborná Silver vein, continue exploration and to move the project, in the Republic of Slovakia, towards production.

Esperanza Resources (EPZ – $1.62), which owns 32% of Global Minerals, participated for $1.5 million in the financing. Certain Sprott funds and clients of Sprott Private Wealth purchased $4.5 million with most of the balance going to existing shareholders.

Sprott Asset Management LP, and its founder Eric Sprott, are among the best known names in the precious metals investment industry. Both have been awarded many times over the past years with their excellent performance.

Financing Increased

Originally, Global Minerals planned to issue 17.8 million units at a price of $0.45 per unit for gross proceeds of $8 million. Due to high demand however, it increased the size of the private placement a few days later to 25,555,555 units for gross proceeds of $11.5 million.

One unit consists of one common share of Global Minerals and one warrant. The common shares are subject to a four month holding period and each warrant entitles the holder to acquire an additional common share at a price of $0.75 per share within a period of two years.

Update on Strieborná

Since our previous photo update on Strieborná, work continues to progress. The team is rehabilitating the shaft as more water is pumped out. At a depth of 100 metres a sump and an additional pump is being installed. This is done so that the pump at the end of the hose, which is on the surface, doesn’t have to pump water up from deeper than 100 metres.

Also the hoisting mechanism to get people and equipment up and down the shaft has been fully restored.

Conclusion

We see several positive facts about this financing. First, with Sprott, Global Minerals gains a long-term focused shareholder with an excellent reputation. For example, the day the original private placement was announced, the stock traded over 600,000 shares, four times its average number. Sprott affiliates and Sprott managed accounts now control close to 12% of the Company.

Moreover, before making this investment, Sprott conducted a due diligence review of Global Minerals and its assets. So by actually subscribing to the financing, we have third party confirmation of the Strieborná potential.

And finally, with a cash position of more than $14 million after the financing closes, Global Minerals will have enough money to restore access to the Strieborná vein, commence an underground drill program to increase the already substantial resource estimate, prepare a Preliminary Economic Assessment and rehabilitate the rest of the property. In other words, do what’s necessary to bring the property several steps closer to production.

It’s obvious that the value of the Strieborná property will increase as it progresses and is further developed. This should have a positive impact on Global Minerals’ share price and as such on Esperanza Resources’ stake in the Company. When this financing is concluded, Esperanza’s stake in Global Minerals will drop to about 28%.


For important disclosures, please read our disclaimer.

0 comments… add one

Leave a Comment