Kenorland Minerals (KLD.V) has announced Franco-Nevada (FNV) has acquired 10 million shares of Kenorland through two private transactions. John Tognetti sold 7.95M shares at C$2.22 per share while CEO Zach Flood sold 2.05M shares at the same price. This results in a combined purchase cost of C$22.2M. As these were secondary sales, no proceeds will go into Kenorland’s treasury. But just a few weeks later, Kenorland announced a C$11M financing priced at C$2.10 and if and when completed, this would boost the treasury again towards C$20M (with an additional C$16M in equity investments).
It is quite obvious Franco-Nevada is likely very interested in the 4% NSR on the Frotet gold project in Québec. Even if the buyback clause is activated, allowing Sumitomo Metal Mining to repurchase 0.75% of the NSR in two tranches for C$13M in cash, the fair value of the remaining 3.25% NSR likely represents the entire market capitalization of Kenorland right now.
Disclosure: The author has no position in Kenorland Minerals. This post is for educational purposes only; be mindful investing in junior mining stocks is risky and you may lose your entire investment if things go wrong. Please read the disclaimer.
