Canaccord brokers pile back into North Country Gold

At least 14 Canaccord Genuity brokers have picked up shares in Nunavut-focused gold explorer North Country Gold (NCG-V) in a recent private placement. North Country raised $12 million in late December by issuing 10.2 million flow-through shares and 3.7 million common shares at 90¢ and 75¢, respectively.

A TSX Venture Exchange bulletin released on Jan. 25 has revealed 135 placees subscribed to the financing, with at least 14 Canaccord advisors, mostly from Vancouver, disclosing purchases of 25,000 or more shares each. Combined, they acquired just over 1.5 million shares. None of the participants of the financing were company insiders.

The largest individual buyers were Vancouver broker Cameron Currie with 650,000 common shares and Erik Dekker, a Canaccord vice-president and senior investment advisor, with 333,333 flow-through shares.

Canaccord has been a strong supporter of North Country ever since it listed in early 2010 around 30¢ a share. Helped up by several speculative buy recommendations from Canaccord analyst Wendell Zerb, the stock surged to a short-lived high of $2.05 in mid-2011 before retreating to its current level around 75¢.

Along the way, Canaccord has acted as the lead or sole underwriter for every one of North Country’s financings, helping the company raise over $50 million. For its services, the brokerage firm has received a total of $2.21 million in agent’s fees, as well as 1.6 million warrants exercisable at 25¢; 100,000 common shares issued at 25¢; 388,000 warrants exercisable at 32¢; 187,000 shares issued at 50¢; 706,000 warrants exercisable at 50¢; 689,000 warrants exercisable at $1.47; and 461,000 warrants exercisable at $1.

Though a few Canaccord executives picked up large positions in North Country private placements early on when the stock could be had for cheap, until now Canaccord professionals have stayed away from participating in a financing. In August 2010, Canaccord’s chairman, Peter Brown, and a few others acquired shares at 32¢ apiece.

Canaccord analyst Zerb still has a speculative buy recommendation on the stock with a 12-month price target of $2.20. He had a similar buy recommendation for North Country in December 2010, when the stock could be had for $1.20.

Until last month North Country was under the umbrella of the Howe St.-based Discovery Group, a group of 7 or 8 resource companies managed by John Robins, John Williamson and a handful of other mining executives. Beginning in January 2012, however, the Discovery Group split into two, with North Country heading one group and the other half now calling themselves the Aurora Resource Group. Several of the companies are exploring for precious metals in Canada’s far north, the most well known of which is Kaminak Gold (KAM-V).

North Country hopes to complete 40,000 plus metres of drilling in 2012 at its high-grade Committee Bay gold project in Nunavut, where it expects to employ 4 to 5 drill rigs this year. Its goal is to expand the existing resource to 3 million oz. gold or more.

The company may have to raise more money soon, however; as at Dec. 31, 2011, North Country had $12.9 million in working capital and 111 million shares outstanding. It spent $25 million on 2011 exploration, completing 30,000 metres of drilling using up to seven rigs. The company expects to release an updated resource estimate later in the first quarter.