Kivalliq's $2.7 million wasn't easy
President explains major challenges in attracting financing
Karen K. Ho
Northern News Services
Monday, May 18, 2015
VANCOUVER
Vancouver-based uranium exploration company Kivalliq Energy Corporation (TSX-V:KIV) has revealed the level of difficulty involved in completing its recent $2.7 million non-brokered private placement.
A diamond drill rig at Kivalliq Energy Corp.’s Angilak property, during the 2011 exploration season. President Jim Paterson said the recently completed $2.7 million fundraising round was much more difficult to complete than when the company raised $22 million three years ago. - photo courtesy of Kivalliq Energy Corp. |
"If you go back to 2012 we raised $22 million and we spent $20 million," President Jim Paterson told Nunavut News/North. "It's a major difference."
The company has had to scale back expectations at its projects, including its Angilak property. Paterson said fundraising expectations also fell to the point where it was easier to raise the multi-million dollar amount three years ago than it was to bring in the much smaller private placement that closed on April 20.
"Which may sound ironic," he said. "The market conditions out there are pretty shaky."
The economic environment made that funding even more crucial to the operations of the company.
"We weren't doing anything," Paterson said "We were chatting with people, but we weren't closing any deals."
Kivalliq saw the economic downturn coming right after the nuclear disaster at the Fukushima reactor in Japan.
"It just caused the industry to be effectively decimated in terms of capital," Paterson said.
Even though four years have past since that event, choppy market sentiment still made it extremely difficult to predict the possibility of the company successfully completing their 2015 finance goals. "Investors spend a lot more time being careful and they're not greedy, they're more nervous," Paterson said, citing increased analysis of demand for commodities as well as jurisdictional risk and support. "Now that it's done, we know what we need to do."
The company plans to start drilling at its Angilak property in the first week of July, but Paterson said the success of the drilling will dictate how big the program will be.
"If it isn't (successful) and the market tells us that it isn't, we'll have a pretty small window of a month, a month and a half of work," he said.
If Kivalliq's exploration is successful at its Dipole site, Paterson said the company is prepared to expand the program.
At press time on May 14, shares of Kivalliq closed at 12.5 cents, unchanged from the prior day's closing price.
On May 8, 2014, the stock closed at 20.5 cents per share.
