South32 is shelling out C$29.2 million for a 19.9% interest in American Eagle Gold, which is in the third year of drilling at its NAK copper-gold discovery in central British Columbia.
South32 is the second major investor to acquire just under a 20% stake in the junior. Teck Resources already owns 19.9% of American Eagle Gold, and has the right to maintain that stake. If it does participate, the final amount raised by American Eagle will be higher.
To gain its initial stake in American Eagle, South32 has agreed to pay a 15% premium to the junior’s 5-day volume-weighted average trading price on the Venture exchange. The financing will see American Eagle issue 33.3 million shares to South32 at C$0.875 each. No warrants will be issued in the non-brokered private placement.
The investment will bring American Eagle’s treasury to C$37 million, enough to fund expanded drill programs in 2025 and 2026. The company said it will share plans for its 2025 drill program after receiving all assays from this year’s campaign.
“We are very pleased to welcome South32 as a strategic investor in American Eagle. This investment marks our second major mining enterprise that has endorsed our project and our work at the NAK copper-gold porphyry project,” American Eagle CEO Anthony Moreau said in a release. “This investment underscores NAK’s potential, significantly strengthens our balance sheet, and enhances NAK’s profile.”
The financing gives South32 the right to nominate one director to American Eagle’s board. The companies will also enter an investor rights agreement once the financing closes, around Nov. 26.
Shares in the C$117 million market cap junior climbed 8.5% or C$0.07 this morning in Toronto to trade at C$0.88 apiece. The stock has traded in a 52-week range of C$0.18-C$0.91.
American Eagle is finishing up this year’s 15,000-metre drill program at the NAK porphyry project in BC’s Babine district. In August, the company reported three holes that returned over 100 meres of 1 gram gold equivalent or better from surface that expanded its at-surface, high-grade “Gold zone.”
The deposit has been traced for 1.2 km north to south, 350 metres east-west, and to 850 metres depth.
