How can Secova Metals Corp., the young junior from Vancouver, raise exploration funds with seeming ease when so many others find themselves shut out of the market? And raise money it has.
On Sept. 21, 2015, Secova closed the first tranche of a non-brokered private placement for gross proceeds of $265,600. The company issued just over 5.3 million units at a price of $0.05 per unit. Each unit consists of one common share and one-half of one share purchase warrant. Whole warrants may be exercised by the holders to acquire a common share for $0.10, for a period of one year from the date of issue.
The second tranche, worth $50,000, closed on September 30, 2015 for a combined proceeds of $315,600.
Financing is tough these days, so Secova CEO and chairman Brad Kitchen said it was something of a coup to attract funding to a project at this early stage, even though there have not yet been any regulatory compliant resource estimates completed for the property.
“In my mind,” he said, “Quebec is the best place in the world for juniors, especially those interested in gold. The government offers super flow-through credits and the First Nations in Quebec are business savvy. Further, the province has both the geological and people resources needed to succeed.”
The bulk of the net proceeds will be spent at the Duvay advanced gold project 17 km northeast of Amos, QC. A winter 2015-16 drilling program is planned.
And that brings us to the first reason investors are interested in Secova: the property lies in the prolific Abitibi Greenstone Belt. The area has a long history of successful gold mining, and it enjoys existing infrastructure such as power, paved roads, and internet access. No camp will be necessary because there is housing and hotel accommodations nearby.
Secova has an option to earn a 65% and then a 90% interest in the Duvay gold claims. The first interest will be earned by paying $500,000 to Tres-Or Resources and spending a further $3.75 million on exploration over a four-year period. To complete its 90% interest, Secova will spend another $12 million to move the project forward and produce a prefeasibility study.
The Duvay property is in the advanced stage of exploration. It has been investigated on and off since discovery in the 1930s. In the 1990s, a resource of 500,000 oz of gold was estimated along a strike of 250 metres to a depth of 50 metres. This is a historic, non-compliant estimate, and Secova plans to compile the first 43-101 report using proven historical and recent drilling combined with the company’s own information. The company believes the strike length will ultimately be about 1.5 km.
The second reason Secova is attracting investors is due to the quality and experience of its people.
At the helm of Eagle Hill Exploration, Kitchen was key to keeping the company afloat and eventually buying the Windfall Lake gold property in Quebec from Noront Resources. His knowledge of the property helped advance the project through to a preliminary economic assessment. Last spring Oban Mining gained a 100% in Windfall Lake when it acquired Eagle Hill as well as Ryan Gold, Corona Gold and Temex Resources.
Joining Secova in April 2015, Kitchen has surrounded himself with a team that immediately set about understanding the geological model at Duvay and developing an exploration plan.
As so many other juniors have been laying off staff and are lacking investor interest, Kitchen counts himself fortunate. On the horizon is the winter drilling program, tentatively planned to cost about $500,000.
“No one else is doing anything now because they are waiting for the market to rebound,” he explained. “That means the hard costs of exploration are down by a third, and we have the pick of high quality geologists. When the market does turn around, Secova will be well positioned to advance Duvay more quickly than other juniors who held back on project exploration work during this time.”
With funding and a solid exploration plan going forward, Secova and its Duvay project hold a great deal of promise. The website SecovaMetals.com will be completed soon.