Teck invests in Armenia explorer Fremont Gold
Fremont Gold (TSXV: FRE) has received an equity investment from Canadian mining major Teck Resources (TSX: TECK.B) to support the company’s exploration efforts on its two main projects in Armenia.
Fremont currently holds rights to the Vardenis copper-gold property, previously worked on by Dundee Precious Metals, and the Urasar District gold project, for which it obtained an exploration permit last year.
Both projects are located within the central Tethyan Belt of Armenia, which is known for its epithermal and porphyry deposits and is host to 12 operating mines, including the world-class Sotk gold mine.
Proceeds of the financing will be used to undertake a minimum 22 line km IP survey at the Vardenis project and the first drill campaign at the Urasar project, among other exploration activities this field season, Fremont said.
“We are very pleased to welcome Teck as an investor, and believe their participation is an important endorsement of our two Armenian properties,” Fremont CEO Dennis Moore said in a press release Wednesday.
The investment is part of a private placement by Fremont totalling 20.15 million units at C$0.10 per unit for gross proceeds of C$2 million. Each unit comprises one common share and half of a share purchase warrant, exercisable at C$0.17 per share.
Teck purchased 4 million of those units, resulting in a 6.89% ownership of the company. Should all warrants included in the units be exercised, Teck’s ownership would then rise to 9.99%.
Moore himself also participated in the financing, purchasing 500,000 units but saw his equity holding diluted down from 15.71% to 11.12% upon completion.
Shares of Fremont Gold shot up by 20% to C$0.12 apiece on the TSXV by 12:10 p.m. ET, for a market capitalization of C$4.6 million ($3.3m).