Geomega Resources (TSX VENTURE:GMA) announces a non-brokered private placementof units for proceeds of $206,250 with the Cree Mineral Exploration Board and an institutional fund. The Cree Mineral Exploration Board (“CMEB”) was created following the signing of the Paix des Braves between the Crees of Eeyou Istchee and the Government of Québec.
“The CMEB’s main objective is to facilitate mineral exploration on our Lands to create opportunities for the Cree People that are respectful of our environment and values, this investment is also strategic for us, since it encourages the diversification of minerals explored on our lands” comments Mr. Jack R. Blacksmith, Chairman of the Cree Mineral Exploration Board.
“The Crees of Eeyou Istchee are important stakeholders in the Montviel project and Quebec’s Plan Nord. Their participation in the Offering solidifies our relationship with the acceptance of GéoMégA on the territory. ” comments Simon Britt, CEO of GéoMégA.
GéoMégA will issue 375,000 units (the “Units”) at a price of $0.55 per Unit. Each Unit consists of one common share and one-half of a share purchase warrant. Each whole Warrant entitles the holder thereof to acquire one additional common share at a price of $1.00 per share (a “Warrant Share”) at any time for a period of eighteen (18) months following the closing of the Offering.
The proceeds from the Offering will be used to fund the development of Montviel through the Preliminary Economic Assessment and for working capital purposes.
The Offering is scheduled to close on or about May 24, 2012…
I would add that GeoMegA’s relationship with the Cree Nation of Eeyou Istchee, Waswanipi at Montviel is actually critical for several reasons beyond the obvious need for mining projects to have local community support. The Cree Waswanipi will be the major constituents in the permitting process that is being initiated and they will have an opportunity to not only make their concerns known at each step but also to file legal appeals, and if the proposed new Quebec mineral development rules become law, to simply reject the project as harmful to their community. Moreover, the Waswanipi lands are potentially critical because they lie between Montviel and the shortest path to power (there is a proposed new 25kV substation at Waswanipi to be built by 2015) as well as potential road- and rail-head access.
Fortunately GeoMegA has done a very good job of early engagement starting with the development agreement announced last year. That agreement was the cornerstone for the current investment by the Cree Mineral Exploration Board (CMEB). Although not a large dollar amount (CMEB is not a big investment fund, after all), is still very significant in that few non-Cree companies receive funding from CMEB. In this case, CMEB is clearly looking for a significant financial return but more importantly is showing strong Cree Nation support for the advancement of Montviel by this particular management team (I’m sure to the chagrin of the “university professors of business ethics” who were the original founders of GeoMegA’s predecessor company and currently its biggest detractors).
While there will no doubt be permitting and infrastructural challenges that GeoMegA will have to overcome as it tries to advance Montviel on a fast track, the prospect of First Nations advocating project development instead of opposing it is simply a huge benefit that could manifest in ways other than simply a shorter permitting timeline. For example, it could help with the securing of strategic and industrial partners, project funding, Quebec and federal special programs or development aid, etc.
a year ago
May 17, 2012 at 3:28 pm
Unfortunately Geomega missed an opportunity here by making a terrible headline choice for this press release. Many more people would have read this news and understood the positive implications of the investment by the Cree Mineral Exploration Board had the headline been something more like “Strategic Investment by the Cree People in support of Geomega’s Montviel Project”.
The headline used just sounds like more dilution and such a minuscule amount that it is hardly worth investigating. In reality it’s an investment being made at a significant premium to the market price by a group whose support is prerequisite for smooth project development.