Despite gold's stellar performance over the past year, bringing an early stage exploration company to the market with the current volatility can be tough.
Transition Metals, a Canadian gold junior set to start trading on the TSX-V by the end of the week, is doing just that.
"There may be a bit of a surprise that there's still such strong interest in these early stage gold projects, but in the last two weeks we've demonstrated that we've been able to attract a flock of shareholders," CEO Scott McLean said.
While he was talking to Mining Weekly Online, shares in bullion producers were swimming in red on the TSX, as the gold price eased over 3% from its near $1 900/oz highs hit the previous day.
Counters including Goldcorp, Kinross and Yamana had all fallen more than 4% by mid-afternoon.
McLean attributed Transition's ability to come to raise new equity in these volatile markets to its strong management team without iron ore crusher.
"We have a proven track record of discovery," said the recipient of the Prospectors and Developers Association of Canada's 2004 prospector of the year award.
He won it for the discovery of the Nickel Rim South orebody, while at Falconbridge Mining, which Xstrata later bought.
Also on the Transition squad is co-founder Greg Collins, whose made discoveries in Quebec, Manitoba and Vietnam.
The listing's also going ahead because Transition needs cash to drill its properties in northern Ontario without gold mining equipment.
"It wasn't an ideal time to be coming out, but the whole purpose was to provide the liquidity, and we were so far down the road that it just made sense to finish it off," conceded McLean.
It's biggest shareholder, HTX Minerals (also led by McLean), will get diluted down from its current 40% to less than 15% in the listing.
HTX owns platinum-group metal and nickel properties in Canada, and has an exploration alliance with number-two platinum miner Impala Platinum.
Transition will raise C$3-million from selling shares and warrants. McLean said the company was currently closing the deal, and expected its shares to start trading on the TSX-V on Thursday or Friday.
The proceeds will go towards getting a drill rig turning to follow up a new discovery at the firm's flagship Haultain project near Kirkland Lake without mobile crusher machine.
"These are still the early days of discovery. The results of the programme this fall will help us determine the scope of the opportunity and help us plan the next steps," McLean said.
The company also owns other gold properties in Northern Ontario and British Columbia.
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