District Metals (DMX.V) is getting ready to drill the first hole at Tomtebo by the end of this month after securing all necessary permits from the relevant authorities. The company is planning to complete approximately 5,000 meters of drilling in 21 holes on four distinct zones at Tomtebo. We could rehash what the company said, but the press release issued by District Metals actually does an excellent job in providing investors with the relevant information as it contains a breakdown of how many holes and meters will be drilled at which specific zone, while highlighting the historical assay results of those four holes. You can read the press release HERE.
Drilling Tomtebo is what everyone has been waiting for since the deal to acquire Tomtebo was announced about a year ago. District has just raised C$4.75M in a financing priced at C$0.30 per unit (with each unit consisting of cone common share and half a warrant with each full warrant allowing the warrant holder to acquire an additional share of District Metals at C$0.42 within 2 years after closing. There is an acceleration clause as the company can accelerate the expiry date if the share price trades above C$0.70 for at least 10 consecutive trading days. And that’s fine, considering that’s about 50% higher than what District Metals is trading at these days.
As per the most recent financials, District still had C$1.9M in working capital as of the end of September, and we estimate the company still has in excess of C$5M in the bank. With an initial drill program of 5,000 meters which shouldn’t be too expensive, District is in an excellent position. Should the initial drill results at Tomtebo confirm the presence of high-grade polymetallic zones, District should have no issue whatsoever to raise more money on the back of a discovery.
Disclosure: The author has a long position in District Metals. District is a sponsor of the website. Please read our disclaimer.