Elevation Gold Looks To Raise $12.0 Million At First Sign Of Positive Sector Tailwinds

The trouble with junior gold companies, is that they always try to raise funds the moment there is a whiff of bullishness in the sector – and before their share price can even react to that sector sentiment. Elevation Gold Mining (TSXV: ELVT) is the latest firm to fall prey to this, announcing a financing mid day today after an early morning halt of trading.

The financing will see the company raise gross proceeds of up to $12.0 million under a marketed public offering of units. Units under the offering are priced at $0.53 per each, a substantial 23% discount to the closing price of the equity on Friday – before the effects of the bullish gold movement that occurred this weekend could even impact the equity.

Each unit under the offering is to contain one common share and one whole purchase warrant. Warrants are valid for a period of five years from the date of issuance, and contain an exercise price of $0.70 per share.

An over-allotment option has also been granted in connection with the offering, which could see up to 15% of addition units sold. Proceeds from the offering are to be used for the continued development of the Moss Mine, as well as working capital and general corporate purposes.

Further dilution will also be hitting the company in the form of debt settlements, which will result in 5.6 million units being issued to cover $2.96 million in debt. The units are believed to have the same terms as that of the offering.

The financing follows a US$6.0 million short term gold arrangement entered into with Maverix Metals at the end of January. That deal will see the company repay a total of US$7.0 million in the form of refined gold by June 28, 2023.

In terms of the reception of the financing, lets just say that investors are less than pleased with the announcement.

The equity closed down 24.6% today on volume of 679,945 shares at $0.52 per share.

Information for this briefing was found via Sedar, and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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