Labrador secures backing for Kingsway project, shares up

First phase exploration on the Kingsway project in Newfoundland. Credit: Labrador Gold.

Labrador Gold (TSXV: LAB) has closed a non-brokered private placement of 7.5 million units at C$0.54 per unit for gross proceeds of C$4.05 million. Each unit comprises one common share and one share purchase warrant, with each warrant exercisable at C$0.60 for a period of two years.

Palisades Goldcorp, which mainly invests in junior exploration companies across Canada, purchased all the units through a donation arrangement, thus becoming an insider and the largest shareholder of the company, with an approximate 13.57% stake.

Palisades is also the largest shareholder of New Found Gold, which is exploring the Queensway project located along strike of Labrador’s Kingsway project in Newfoundland.

Last November, New Found Gold announced a significant discovery at Queensway with a drill interval of 19 m at 92.9 g/t Au — the best ever reported in the province. This was followed up by a recent drill intercept of 41.25 m at 22.3 g/t Au at the Keats zone, which propelled the miner’s stock up by nearly 34% within a span of two days this week.

“The discoveries at New Found’s Queensway project are along the Appleton Fault Zone, which extends onto Labrador’s Kingsway project,” Palisades founder and chairman Collin Kettell said.

“Sampling along the Appleton Fault Zone has returned significant gold mineralization, for example up to 61.7 g/t Au at the Cracker showing. While at an earlier stage, we believe there is excellent potential to find similar high-grade epizonal style gold mineralization at Kingsway.”

“Palisades becoming an insider of LabGold is a vote of confidence in the company and in the potential of the Kingsway project,” Labrador president and CEO Roger Moss said. “We are now well capitalized to continue our aggressive exploration program to make the next discovery in the Gander gold district.”

Shares of Labrador Gold surged 27% by 2 p.m. EDT Friday. The Newfoundland-focused gold miner has a market capitalization of C$40.8 million.

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