Scottie Resources rose as much as 30 percent following news that billionaire Eric Sprott is claiming a stake in the Canadian explorer.
The non-brokered private placement financing will see Sprott acquire 10 million units of Scottie Resources at C$0.20 each for a total investment of C$2 million and an 11.5 percent stake in the company.
Each unit will be comprised of one common share and one common share purchase warrant. The purchase warrants are good for 24 months from closing for C$0.30 per common share.
The precious metals company owns several projects in British Columbia’s Golden Triangle, including the past-producing Scottie gold mine, which yielded 95,426 ounces of gold in the early 1980s.
Currently the company has exploration rights for more than 18,500 hectares in the southern portion of the Golden Triangle.
2020 is off to a positive start for the company, which released drill results from the Bow property earlier this month. The program at the asset confirmed and expanded the gold and silver resource located within the Bend Vein deposit.
“The assays from the Bend Vein confirm the superb results of previous studies, and demonstrate a truly underexplored high-grade gold and silver target,” said Bradley Rourke, CEO and president of Scottie Resources, in an announcement.
“… Our drilling this season proves that the mineralized structure extends deeper than previously tested, and substantially increased the strike length of known mineralization.”
2020 drill programs at the Bow property will be used to confirm the scale of the deposit.
As for Sprott, this isn’t the first time the mining financier has had a positive effect on a company’s stock.
Aside from those and other investments, the successful businessman recently put his name to use when he backed the Save Canadian Mining initiative. The advocacy group is focused on reinstating a securities trading rule referred to as the “uptick rule” or “tick test.”
“I’ve done lots of short selling in my life because I recognize there’s anomalies in the market … but I’ve always worked under the premise of the uptick rule, and that means you can only short when a stock is trading up or flat,” Sprott told the Investing News Network in a November interview.
Shares of Scottie Resources were up 8.3 percent on Monday (January 13), trading for C$0.26.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.