Goldshore Resources: Strategic investor takes up majority of current placement

Goldshore Resources (TSXV GSHR / FSE: 8X00) is looking to advance its exciting Moss gold project. To date, CEO Brett Richards’ company has demonstrated an inferred resource of about 6 million ounces of gold at Moss and now wants to update that to then have a preliminary economic assessment (PEA) done on the project. The capital required for this is now being provided, for the most part, by a single, strategic investor.

Indeed, Goldshore reported that it plans to raise a gross total of CAD 3.75 million through a private placement. For this, the company said, 37.5 million units will be issued at CAD 0.10 per unit, consisting of one common share and one warrant. The warrant is exercisable for 36 months at CAD 0.13.

Financed through to 2025

As Goldshore explains, the proceeds of the capital increase will be used to further advance the Moss gold project. First of all, a new resource model will be created and subsequently a new resource estimate. In addition, engineering and metallurgical studies will be conducted on various leaching methods, including the low-cost heap leach method. All of this information will then be used to conduct a preliminary economic assessment (PEA) of the Moss project.

According to Goldshore, drilling totaling 80,000 meters has been completed at Moss to date and a total of $48 million has been invested to define the initial resource with its 6 million ounces of gold. Now, the company believes it is well positioned to achieve key milestones with the Moss project within the next 24 months. And, Goldshore says, it can do so with minimal cash outlay and within the company’s current financial circumstances.

Strategic partner with long-term financial commitment

Goldshore also announced in relation to the current financing that it has entered into a strategic partnership with a private equity group active in the resource sector. This group, the “strategic advisor” as Goldshore calls it, will acquire 30 of the 37.5 million units in the placement for the equivalent of CAD 3 million. This, according to the company, is accompanied by a “long-term financial commitment to unlock the value of the Moss Gold Project.”

Conclusion: Having to raise capital at the current level is certainly not ideal for Goldshore. However, it is currently very difficult for almost all juniors in the resource sector to raise new capital, so in our view it is a good sign that Goldshore has apparently found strong hands for the majority of the new shares with the unnamed private investor. Now we are eager to see what the new resource modeling and the new resource estimate will bring.