Vancouver Robert McEwen has picked up shares and joined the boards of two more junior companies exploring for gold in Nevada, namely Nevada Pacific Gold (NPG-V) and Coral Gold Resources (CGR-V, CGREF-Q).
The founder and former chairman of Goldcorp bought an 18.2% stake in Nevada Pacific, or about 12.5 million units priced at 40, for proceeds of $5 million. Each unit consists of one common share and one warrant exercisable at 50 per share for a two-year term. The company’s shares doubled to 80 after the announcement was made.
McEwen will join Nevada Pacific’s board, and assuming the warrants are exercised, will own about 30.8% of the company. As this constitutes a change of control under regulatory rules, Nevada Pacific shareholders would have to approve the second tranche of the private placement at a special meeting to be held on Jan. 23, 2006.
Nevada Pacific owns the Magistral gold mine in Mexico, where operations were recently suspended, and a portfolio of exploration properties covering about 75 square miles in two main gold belts of Nevada. Several are optioned to Placer Dome (PDG-T, PDG-N).
Coral Gold holds a portfolio of claims along the Battle Mountain-Eureka and Cortez gold trends in north-central Nevada. McEwen will become a director and executive chairman of the company and will own about 20% of the company’s shares through a private placement of 1.5 million shares at $3 per share.
Shares of Coral Gold closed at $3.50 per share after the announcement was made, up from $1 just one month earlier.
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