District Metals (DMX.V) has taken advantage of the momentum in its share price after the company announced it had staked the Viken license in Sweden, thereby covering the majority of the land once owned by Continental Precious Metals.
District raised exactly C$3.M in a brokered private placement financing priced at C$0.15 per unit. 20 million units were issued with each unit consisting of one common share as well as half a warrant. Each full warrant allows the warrant holder to acquire an additional share of District Metals at C$0.20 for a period of three years after the closing date. The total amount of finders fees was approximately C$240,000 which means the net proceeds will be just over C$2.7M and that will be a tremendous boost to District’s balance sheet.
Just a few days after completing the placement, District announced it has applied for additional mineral licenses at Viken, covering the area directly to the south and the north of the original Viken license (which already covers about 68% of the known polymetallic deposit). If/when those additional licenses will be granted, the total size of the Viken project will quadruple to in excess of 9,000 hectares.
District isn’t just ‘blindly’ staking land. It has access to the exploration data from a drill program completed on the Viken 2 and 3 licenses and the grades and widths encountered in that drill program are consistent with the results seen on the ‘main’ Viken license and this could allow District to rapidly expand the known resource (from 2014).
The deposit will obviously remain low grade, but as we explained in a January update, this type of deposit could benefit from economies of scale so the larger the resource estimate is, the more likely it is a mine plan could effectively be optimized to improve the potential economics of the project.
The mining inspectorate in Sweden will likely reach a decision on the Viken 1 mineral license by May 2023, which is shortly after the vote on lifting the uranium moratorium will be held.
Disclosure: The author has a long position in District Metals. District is a sponsor of the website. Please read our disclaimer.