by Frik Els | September 25, 2013 | Reprinted by permission of Mining.com
Barkerville Gold Mines TSXV:BGM announced Tuesday a $15-million loan from a company (2176423 Ontario Ltd) wholly owned by Eric Sprott.
Frank Callaghan has reason to smile.
Barkerville will use the money to keep operating, apply for reinstatement on the TSX Venture exchange and pay back a $1.5-million bridge loan from Sprott Resource Lending Partnership.
The lifeline extended by Sprott comes less than a week after the legendary precious metals investor sold some six million shares at $2.70 in his investment management company Sprott Inc TSX:SII according to Canadian Insider.
Trade in Vancouver-headquartered Barkerville was suspended in August last year after problems with the technical report for its Cariboo project in central British Columbia.
At the end of June 2012, when Barkerville announced mouth-watering resource estimates—10.6 million ounces of contained gold at some of the best grades in the industry—for the Cow Mountain section, its stock exploded.
It did not take long for red flags to be raised about what would have been one of the richest gold deposits in the world. The stock duly tanked.
Almost a year later the updated estimate shows a much more sober resource of 1.04 million ounces indicated and 3.94 million ounces inferred.
When Barkerville’s shares start trading again it will be interesting to see if retail investors display the same kind of confidence in the company as Eric Sprott clearly does.
Reprinted by permission of Mining.com