Canamex Gold (CSQ-V) offering one million gold royalty tokens at $6.25. The tokens, which will be redeemable in lots of 200 for a one-ounce bar of fine gold, are linked to production from the company's Bruner gold project in Nevada. Canamex calculates the market premium to the offering price at 35 per cent, in part to cover the risks of what is essentially a royalty on Bruner: The tokens will have a 13-year term, implying that they will have no value if Canamex fails to get its Bruner project into production within that time.
The bulk of the cash to be raised is for further development work on Bruner. Canamex plans engineering work, environmental permitting and other work ahead of a feasibility study. Bruner, of course, is the key to the company's future, not to mention that of the buyers of the tokens. The project received a preliminary economic assessment a month ago that credited it with a discounted net present value of just under $70-million (U.S.) for a $37.8-million (U.S.) mine that would run at 7,500 tonnes per day and produce over 40,000 ounces per year over eight years. At last report, Bruner held 19.6 million tonnes indicated at 0.56 gram of gold and 5.32 grams of silver per tonne, plus 2.3 million tonnes inferred at slightly lower grades, for a total of just under 400,000 ounces of gold and 3.6 million ounces of silver. |
