Dundee ups stake in Reunion Gold to 17.2%

Dundee Corp.’s [DC.A-TSX] Dundee Resources Ltd. unit has increased its stake in Reunion Gold Corp. [RGD-TSXV] by paying $5 million to acquire 28.6 million common shares of Reunion at 17.5 cents a share.

The announcement comes after Reunion completed a bought deal private placement that raised $11.5 million, money that will be used to accelerate exploration activities, including drilling and trenching at Reunion’s OKO West project in Guyana.

Under the terms of the bought deal financing, Reunion issued 65.7 million common shares at 17.5 cents a share, including 8.6 million that were issued to allow the underwriters to exercise an over allotment option.

Dundee Goodman Merchant Partners, an affiliate of Dundee Corp., was one of the lead underwriters and received 1.17 million non-transferable compensation options, which entitle the holder to purchase one common share of Reunion for 17.5 cents until February 24, 2024.

Dundee and its affiliates now control shares and compensation warrants equal to a 17.2% stake in Reunion (undiluted), up from 14.92%.

On February 24, 2022, Reunion Gold shares rose 4.3% or $0.01 to 24 cents on volume of 2.36 million. The shares currently trade in a 52-week range of 26.5 cents and $0.055.

Reunion Gold is a leading gold explorer with a portfolio of projects in the Guiana Shield in South America. Two years ago, the company formed a strategic alliance with Barrick Gold Corp. [ABX-TSX, NYSE] to explore, develop and mine mineral properties in the Guiana Shield.

Under the deal, the two companies pledged to form a 50:50 alliance that will cover certain mineral projects in Guyana, Suriname, French Guiana and the north and northeast regions of Brazil. Barrick committed to increase its stake in Reunion to 19.9% from 15%.

The Oko West project is in the Cuyuni Mining District, about 95 kilometres west of Georgetown and is accessible by roads and trails from the town of Bartica or by boat using the Cuyuni River.

The project covers 11,900 acres of mineral rights held by local Guyanese entrepreneurs. Reunion entered into agreements entitling it to conduct exploration activities and acquire a 100% in the project area.

Reunion is currently working to define the total extent of gold mineralization at Oko West. It keeping with that goal, the company has moved to a 15,000-metre phase four drill program that is expected to be completed by the end of the second quarter of 2022.

The program will include drilling along the 2.5-kilometre-long Kairuni zone to confirm the vertical depth continuity of the zone in support of a maiden resource in the second half of 2022. The company is also planning to initiate exploration on targets outside the Kairuni zone.