Issue link: http://resourceworld.uberflip.com/i/142120
Juniors with senior partners by Ellsworth Dickson M ineral exploration and development are very capital intensive activities. Often, junior exploration companies recognize that they have a valuable mineral prospect; however, on occasion, it makes sense to bring in a senior or mid-tier mining company with deep pockets to fund exploration and/or development programs. Some juniors are known as 'prospect generators'; they don't want to spend a great deal of money funding their exploration projects and they don't want to build mines. Those juniors formulate a business plan whereby they find other companies to fund their exploration projects. There are several ways to bring in senior or mid-tier partners; a senior can simply buy a private placement in the junior. Another way is for the senior company to option part of the project from the junior. This second method offers the advantage of reducing stock dilution of the junior due to the junior issuing a great many shares to arrange a private placement. On the other hand, when a senior takes an option in a project, the junior's stake in the project will be reduced, though it may not have a big impact if the project is big enough. It's better to own 50% of a large project that can now be advanced than 100% of a project that is stalled due to lack of sufficient funds. This type of arrangement is particularly suited to development-stage projects with typical high capital costs. Another strategy is for the junior to option a project from a senior miner and, if things are advancing satisfactorily, the senior can then earn back into the project at a later stage. For this feature we have chosen 10 junior companies that have various arrangements with senior and mid-tier mining companies. Headframe at Premier Gold Mines' Hardrock deposit at its Trans-Canada Project in the Beardmore-Geraldton Greenstone Belt 17 km northeast of Goldcorp's Red Lake mines in northwest Ontario. Photo courtesy Premier Gold Mines Ltd. 20 www.resourceworld.com ATAC RESOURCES LTD. [ATC-TSXV] Market Capitalization........$112,021,605 Shares Outstanding…….113,153,136 52-week high-low................$2.95-$0.91 Commodity........................................gold CEO................................. Graham Downs Region............................................Yukon ATAC Resources Ltd. recently completed a $13 million non-brokered private placement with Agnico-Eagle Mines Ltd. [AEM-TSX, NYSE] to fund exploration at its Rackla gold project in east-central Yukon. Under the terms, Agnico-Eagle will purchase 9,600,000 units at $1.35 per unit which comprises one share and one-half a warrant. If all warrants were exercised, this would provide ATAC with an additional $10,080,000. ATAC has a 100% interest in the Rackla Project which is characterized by Carlin-type gold mineralization, the first discovery of this type in Canada. The company describes its Rackla Project as divided into two distinct trends: (i) the 50-km long Nadaleen Trend which hosts Carlin-type mineralization at the Conrad, Osiris, Isis East, Sunrise and Anubis Zones: and (ii) the 20-km long Rau Trend which hosts the Tiger gold deposit, Ocelot silver-lead-zinc-tin discovery and the new Bengal gold showing. Property-wide regional exploration has outlined 10 Tier 1 Carlin-type gold targets within the Nadaleen Trend as well as multiple anomalous targets within the Rau Trend. For 2013, drilling will test the new Sunrise discovery that returned 14.86 metres grading 10.54 grams gold/tonne. The Isis East Zone returned 27.43 metres of 6.28 g/t gold. Based on 99 drill holes the strike length of the Conrad Zone is 800 metres and is open along strike and to depth. For the Tiger gold deposit, ATAC is considering conducting a scoping study to advance the project that has an indicated resource of 2,470,000 tonnes of 4.25 g/t gold (337,500 oz). ATAC has made nine drill discoveries to date. JULY 2013