Kenorland Minerals Ltd. (TSXV: KLD) announced Wednesday it has closed a C$5.2 million ($4.2m) strategic investment by Sumitomo Metal Mining Canada Ltd.
Under the financing, Sumitomo purchased approximately 5.21 million common shares of Kenorland at C$1.00 each, which results in Sumitomo owning approximately 10.1% of the company’s share capital.
A majority of the financing proceeds (80%) will be allocated towards Kenorland’s exploration activities, with the remaining 20% to be used for general and administrative purposes.
Kenorland has various mineral exploration projects across North America. In Quebec alone it holds three orogenic gold projects, where work is being completed under joint venture and earn-in agreement from third parties.
The Frotet project, one of the company’s three flagships, is currently held under a joint venture with Sumitomo. Chicobi, a grassroots project, is also optioned to Sumitomo, while the Chebistuan project is under option to Newmont.
In Ontario, Kenorland holds the South Uchi project under an earn-in agreement with a wholly owned subsidiary of Barrick Gold.
The company also owns 100% of the advanced-stage Tanacross porphyry copper-gold project, as well as an option to earn up to 70% from Newmont on the Healy gold project, both located in Alaska.
“We are delighted to welcome Sumitomo Metal Mining as a strategic investor in Kenorland,” commented Zach Flood, president and CEO of Kenorland.
“Sumitomo’s investment is a significant milestone for us and represents a strong endorsement of our team, the Frotet project, and our additional projects and partnerships within the exploration portfolio.”
With the news of Sumitomo becoming a significant shareholder, shares of Kenorland Minerals surged 9.8% by 12:10 p.m. in Toronto. The Canadian-based miner has a market capitalization of C$36.2 million.