Within two weeks after announcing a financing of ‘up to C$1M’, Firefox Gold (FFOX.V) has already closed its second and final tranche raising a total of C$570,500 by issuing 3.8 million units. Each unit consisted of one common share as well as a full warrant allowing the warrant holders to purchase an additional share at C$0.20 during a two year period.
The financing was ‘priced to sell’ with a very attractive warrant (which could act as some sort of ‘secondary financing’ further down the road as the 3.8 million warrants would bring in an additional C$760,000), and although Firefox initially mentioned a raise of up to C$1M, it was happy to close on just over half of that amount instead of leaving the financing open. After looking at the company’s financial statements, Firefox appears to have a very low overhead cash burn with almost 70% of the expenses effectively being spent on the project to make more targets drill ready.
Drilling is actually already underway as Firefox has initiated a nine hole drill program on the Mustajarvi zone, where up to 1,500 meters will be drilled. The first four holes will zoom in on the high-grade results that were encountered in last winter’s exploration drill program (with for instance 2 meters containing just over 45 g/t gold) and two holes will test the ground for mineralization an additional 25 and 50 meters down dip, while the remaining two holes will try to expand the mineralization by 25 meters both to the east and the west. Small steps, but these four holes will provide Firefox with a lot of geological data that could then be used to design additional exploration programs.
In fact, the entire drill program is mainly about gaining more knowledge of the deposit as holes 5&6 will focus on the areas that have previously been drilled by Outokumpu which encountered additional high-grade zones. One hole will test for the continuation of this mineralization, while hole 6 will try to twin one of the historical holes in an attempt to recover more of the core (which will help with the interpretation of the structures) as Outokumpu’s drill program had very poor core recovery results due to faults and fractures in the rock.
Holes 7-9 will be the bigger stepout holes as Firefox would definitely like to test whether or not it has a potential elephant by its tail. Two of the three final holes will be drilled almost half a kilometer away towards the northeast while the final hole will be a stepout hole 250 meters in the opposite direction (southwest). As such, these three holes will provide a preliminary indication of the mineralized zone over a 700 meter strike zone.
We will provide a full update on Firefox Gold soon.
Disclosure: The author has a long position in Firefox Gold. The company currently is not a sponsor of the website, but will become a sponsor.