Oversubscribed Equity Offering Enables Follow up Exploration Program at Renforth’s New Alger Gold Property

This week Renforth Resources Inc. (CA:RFR – $0.05 & US:RFHRF – $0.03) announced that a winter drill program is set to commence shortly at Renforth’s New Alger Gold property. The Company anticipates that drilling may be underway as early as mid-January. Planning is currently in process to select optimum targets for this next round of work. Perhaps 2500 meters of drilling work will be conducted in this program.

The funding for this aggressive work schedule has been furnished through a two phase equity placement. Initially, an offering of 550,000 units priced at 5 cents per share was issued. Each unit included a common share along with an attached warrant to buy another share for 7.5 cents, for a period of 24 months.

A second component of flow through units was also completed. In it, a total of 12,503,334 flow through units were issued, priced at 6 cents. Each flow through unit included a common share plus an attached warrant to buy another share for 10 cents.

Flow through equity offerings are structured to enable Canadian resource companies to transfer a tax credit to purchasers of these units. This tax credit is related to expenses incurred during exploration activity. The tax credit offsets 100% of the purchase price subscribed in the offering. This is a powerful additional incentive that effectively removes the investment risk and therefore flow through transactions are often completed at a premium to the market price for the stock.

The combined financing raised a total of $777,700. This amount was more than Renforth originally intended raise, indicating that the Company can rely on a solid base of shareholders.

Map indicating the 2019 drill program at Renforth’s 100% owned New Alger property. Although results from the previous campaign are still pending, a new drill program will soon commence.

High Expectations for New Gold Discovery Zone

Late 2019, Renforth initiated its first drill campaign at the New Alger property. Several prospects were targeted, none of which had been tested through drilling by prior operators of the project area. A total of 2057 meters of drilling was completed in ten drill holes.

Three drill holes were collared to target potential extensions of gold zones around the past-producing Thompson-Cadillac mine. The prolific Cadillac Break structure, an established regional gold-bearing system, extends through this section of the property. Renforth encountered a new gold zone from this work, hosted within sericite alteration outlined to the north of the historic deposit area.

The remaining seven drill holes were focused on the Discovery Vein target area. This prospect is located about 250 meters to the south of the mine area. This area had been overlooked by previous operators of the property, hidden under a layer of overburden. However, preliminary field work identified surface gold showings and vein swarms providing the potential for a new deposit area to be outlined.

Visual inspection of the drill core confirmed that the program had cut several significant vein intersections. Indicator minerals were also encountered that are commonly associated with gold deposits in the region.

Immediate Follow-up Drilling Program to Commence Shortly

All ten of the drill holes from the first round successfully intersected the targeted structures. Assay results from the program are expected shortly. However, the immediate response by Renforth to follow up at these target areas is indeed a promising indication that the geologists are excited about the observations of the drill core.

Renforth plans to commence the second phase at the western end of the New Alger property. The Company will be proactive to respond to observations from each drill core as they proceed. In addition, as assay results are received from last year’s drilling work there may be higher grade gold intervals confirmed that become high priority targets for follow up. This agility to adjust quickly as more data becomes available is one of the reasons that smaller companies like Renforth can be more effective to advance early stage exploration success.

Conclusion

The Discovery Vein target is a new mineralized system that was outlined by the Company. This discovery may evolve into an important gold deposit area as work continues. It is also important to note that exploration so far has been confined to relatively shallow sections. This is appropriate for the initial phases of drilling. However, some of the most productive gold deposits in this district have been outlined at greater depths. Therefore as the work continues to generate positive results from sections of the property closer to surface, the potential for a more significant discovery awaits when deeper drilling work commences.

Renforth is proceeding with an ideal posture to advance activity at high profile target areas. The aggressive decision to quickly follow up with a second drilling program is encouraging. The Company is also open to seize momentum and quickly respond to any early breakthroughs as work commences. This provides the appealing prospect that if a high-grade section is encountered in this round of drilling, a more thorough and meaningful effort to expand on the interval can immediately advance. Smallcaps Recommendation: BUY.

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