Shares of Corex Gold (TSE:CGE) surged Monday after H. Morgan & Company agreed to provide the junior explorer with financing of up to $1.65 million, as well as operational and management services, to help move Corex’s Santana property in Mexico to production.
“Chester Millar, the founder of Glamis Gold, Eldorado Gold, Alamos Gold, and more recently Castle Gold (now Argonaut Gold) is an investment advisor to Morgan,” said president and CEO of Corex, Craig Schneider.
“As such, we are very pleased to have access to a person of Mr. Millar’s experience and expertise involved with the operations of our Santana property en route to one day potentially being a production based asset.”
Shares of Corex rallied over 17.6% on Monday, to 10 Canadian cents, hitting its 52-week high.
Morgan will release the financing in two tranches, with the first tranche of $400,000 to be advanced once due diligence requirements are satisfied and the final form of written agreements are completed. The second tranche of $1.25 million will released once the initial work program is completed, according to Corex’s statement released earlier today.
Each tranche will be structured as a private placement, with the first to be made up of 4.0 million units at 10 cents apiece. Every unit will consist of one common share and one share purchase warrant, exercisable for one additional common share for a period of two years at 15 cents each.
The proceeds must be used exclusively for exploration and development of Corex’s Santana property, the company said.
The deal with Morgan also provides that it will manage feasibility work on the asset, with the aim of moving the project into commercial production. As such, Corex said it will appoint Morgan’s corporate partner, Minas de Guachinango S.A de C.V., a Mexico company, as the manager over the property’s activities.
Morgan also has the right to participate in any future equity or convertible debt financings while the management agreement is in force, Corex said.
