TerraX raises $4.5 million
Company will seek up to $6 million total for Yellowknife City Gold Project
Karen K. Ho
Northern News Services
Wednesday, June 10, 2015
SOMBA K'E/YELLOWKNIFE
TerraX has recently raised $4.5 million from investors.
Two-million dollars from Canadian investment fund CMP was announced Monday.
Company president Joseph Campbell tells Yellowknifer the money from the five million flow-through shares is already being spent on the Yellowknife City Gold Project.
"There are crews on the ground right now," he said, noting that the conditions of the sale mean that the money raised has to be spent on work on the ground, not on administrative costs, within two years.
Flow-through shares are a method of financing where Canadian junior mining firms pass exploration expenses onto individual investors, who can then apply them to their own personal incomes and reduce their own taxes.
TerraX is currently undergoing a joint-exploration effort with Osisko Mining with technical staff performing geological work on targets they've have identified. About 10 to 12 people, including field assistance, are currently on the 94.9-square-kilometre property.
"We are in the process of upgrading the existing road to make it more amenable to larger drilling programs that we intend to carry out over the next two years," Campbell said.
TerraX has also raised $2.5 million with Osisko Mining announced May 13. Campbell said the company has the capacity to raise an additional $1.5 million, for a final total of up to $6 million. "This is just the first tranche of that raise completed to date," he said, using the financial term for "slice."
Following the conditions at the Prospectors and Developers Association of Canada conference in Toronto earlier this year, Campbell acknowledged that there is currently very little appetite in investing. However, he said that putting a lot of time into advertising the Yellowknife Gold City Project, having the financial support of two well-recognized companies as well as a lot of success with discovery results in the deposit itself have all had an impact on how quickly fundraising has been completed.
Campbell also cited the city's existing infrastructure as crucial to significantly reducing many of the costs commonly associated with Northern mining projects, calling the location "second-to-none."
"A larger number than the number going into the ground, is setting up these camps and running them," he said, also citing numerous transportation costs for labour and fuel.
By comparison, a company finding something in the far north can result in a discovery being shelved for years, if not decades without being moved into production due to logistics and high capital expenditures.
"In our case, we're able to get all our services and most of our consumables out of the City of Yellowknife," Campbell said. "We don't have any camps, we don't have to move any fuel around, we drive up to the pumps like everybody else. It's a much simpler, cheaper form of exploration."
The TerraX president said this situation also makes it easier to bring a mining operation online if they find a significant discovery.
The company will announce its final fundraising amount in approximately a week. However, Campbell said TerraX has also raised another $1 million in cash through an option with Osisko for a smelter royalty of one per cent.
