Eric Sprott sold 6m insider shares to throw Barkerville lifeline
Barkerville Gold Mines (CVE: BGM) announced Tuesday a $15 million gold covering 12,500 ounces loan from a company (2176423 Ontario Limited) wholly-owned by Eric Sprott.
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 6 million shares at $2.70 in his investment management company Sprott Inc (TSE:SII) according to Canadian Insider.
Trade in Vancouver-based 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 eye-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 be one of the richest gold deposits in the world and the stock duly tanked.
Almost a year later the updated estimate shows a much more sober resource of 4.98 million indicated and inferred ounces.
When Barkerville's shares start trading again it would be interesting to see if retail investors display the same kind of confidence in the company as Eric Sprott clearly does.