Red Lake Gold (RGLD-Cse) seeking $500,000 through the sale of up to two million shares at 25 cents. The cash is for exploration at the Whirlwind Jack gold project near Red Lake in Northwestern Ontario, as well as for working capital. (The cash is needed, as Red Lake was nearly broke at the end of May. Fortunately, it is not chained to a big current liability like the many zombies shuffling along Howe Street these days.)
There is no word yet about who the buyers might be, but the company tells investors not to be surprised if insiders buy more than 25 per cent of the shares on offer. Indeed, it would be a shock if they did not, as the Kelowna-based Mr. Kalt has been a prolific buyer of Red Lake's shares over the past year, acquiring most of his holdings in dozens of transactions since April at an average of just over 12 cents per share. He currently holds nearly 7.7 million shares, about 30 per cent of the 25 million shares outstanding.
Red Lake Gold acquired Whirlwind Jack a year ago, when the company was Michael England's Pivit Exploration Inc. At the time, Mr. England touted the prospect as being adjacent to the Dixie project, where Great Bear Res. (GBR-V) had just scored an impressive discovery. Mr. Kalt was already gobbling up Red Lake Gold shares, and this spring he took control from Mr. England, becoming executive chairman and chief executive officer in a management shuffle that also saw several other board changes.
Mr. Kalt presumably shares Mr. England's enthusiasm for Whirlwind Jack, which draws its name from Whirlwind Jack Hammel, who opened Red Lake to exploration using airplanes, not dog sleds, in the first half of the 20th Century. Mr. Kalt, like his predecessor, appreciates the "geological likeness" of the property with nearby Dixie, and he is betting big that his company will adopt a passing likeness of Great Bear's stock chart. That will take exploration, of course, and lots of it -- something that has been missing at the Whirlwind prospect so far.
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