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FINDING FUNDING 38 E&MJ; • JULY 2017 www.e-mj.com Bankrolling the next project is not what it used to be. The global downturn that started with a housing market crash a decade ago and continues in Europe was termed a "credit crunch." While the central bankers move to exit the strategies deployed to ease lend- ing and increase money velocity, in some sectors money remains tight. Manipulating interest rates and monetizing bad bets only goes so far. Miners, suppliers and their fi- nanciers say that, since the downturn, in- vestors with expectations shaped by the crunch, new conservative investment ve- hicles, and high technology have changed the task of sourcing funds. A couple of re- cent success stories illustrate this point. Targeting and Networking In early February, Canadian Gold Miner (CGM), a subsidiary of Transition Metals Corp. with 165 square kilometers (km 2 ) of exploration projects on Ontario's Abiti- bi greenstone belt, announced sample results from its West Matachewan pro- ject. The project spanned 25 kilometers (km) along the Cadillac-Larder break west from Alamos Gold's Young Davidson mine. The 1.23-metric ton (mt) sample, taken in July 2016, returned a feed grade of 240 grams per mt (g/mt). The project and others in the region are the company's raison dêtre. Transi- tion spun off CGM with the mission to "aggressively" secure "exploration-stage projects" around "key breaks and struc- tures, like the Cadillac-Larder break and Ridout Structure," said Greg Collins, CEO, CGM. The key word is aggressive, and CGM was to take chances on new projects Transition simply couldn't. "In the last downturn, when financing was difficult to secure, interest just wasn't there," he said. "We saw an opportunity in those dark days to try to consolidate and build the kind of projects that we felt confident would attract investment when the market turned around." West Matachewan was one such proj- ect. Investors surely would notice when a "10-kilogram sample of oversize screenings returned an assay of 2,269 g/mt," he said. That sample and others were taken from three sites at 5 meters (m) apart in a zone that exhibited "appreciable but highly variable grades," CGM reported. The zone of veining, exposed by a me- chanical excavator, ran 35 m, with an average true thickness of 1 m. "The zone consists of quartz-carbonate veining and silicification developed along a faulted contact between serpentinized ultramaf- ic intrusive rocks and dacite, striking northwest and dipping approximately 55° northeast," the company reported. The estimated head grade came in at 256.5 g/mt. The tailings averaged 98.3 g/mt. Roughly three months later, CGM an- nounced it closed a private placement totaling $817,250, with proceeds going in part to drilling at the project. The fi- nancing was arranged by Gravitas Securi- ties. Details included the issuance of al- most 5.3 million units of common share and warrants, issuance of 115,000 flow through eligible shares, stock options for employees, and an agreement to com- plete additional flow through financing. The placement was one step on a path to going public as early as this fall and rais- ing between $10 million and $20 million over a half decade, Collins said. Between those two announcements, CGM networked, leaned on relationships established by the parent company and promoted West Matachewan. Ultimately, it won over Gravitas, with whom it had a pre-existing but indirect relationship. "Transition CEO Scott McClean is in- volved in CGM. He had over time made a number of connections in the Gravi - tas Group," Collins said. "It is probably through that interaction that they became aware of this opportunity." Collins attributed the successful placement ultimately to the potential of the project. Next in importance, he said, comes "networking and putting a lot of effort into communicating with the right people, getting the story in front of the right eyes." Bankrolling a new project in the cur- rent market can be particularly challeng- ing, Collins said. "It seems to be easier for those companies who have projects that are already at a much more advanced Sourcing Finances After the Super Cycle A credit crunch and a mining bear market have created a new generation of investors — realists — making funding challenging for some By Jesse Morton, Technical Writer Sampling at Canadian Gold Miner's West Matachewan project reveals an average feed grade of 240 g/mt Au. Above, a sketch of the vein exposure. (Photo: Canadian Gold Miner)