Okay that headline, while factual is a bit of ‘click-bait,’ so let’s not get too excited!
But it is indeed excellent news.
The stock did trade up 33%, it did trade a modest amount of shares (over one million), and a single investor did acquire a significant (or meaningful) stake. It’s not the tens of millions you see in the tech or biotech sector – but the size of the stake would suggest they are in for the long haul – and certainly not a trade. The company, all companies, want long-term shareholders, which are hard to find these days of instant gratification.
Fairchild expects to close, subject to the satisfaction of applicable closing conditions and the approval of the TSX Venture Exchange, a first tranche of approximately C$1.2 million under a non-brokered private placement financing for aggregate gross proceeds of up to C$1.8 million.
The acquirer was Sprinter LLC described in the press release as an existing significant investor.
Also worth mentioning is that most companies, regardless of size and regardless of the money raised, typically trade down on funding news. About 70% of the time. Fairchild did not trade down, though it gave some back this morning..
As we stated in our report last week:
“For junior exploration miners, “financials” really means one thing: has the company shown it has the ability to raise enough capital, in small tranches to keep moving forward, while minimizing dilution? The answer in Fairchild’s case is yes, as you can probably guess, just by looking at all the heavy hitters from Wall Street, on Fairchild’s advisory board. They have not had any problem raising money. Anything to the contrary would worry us.
So this recent raise shows they are acting rationally with disciplined timing and finding investors to support their long-term gameplan. Which is not always an easy thing. Trading is one thing, investing in large stakes privately is completely another thing, with regards to investor confidence.
They’re taking little bites to get to the next step, then the next step and so on. If Fairchild has the exploration (discovery) success that we think (hope) they will, it won’t matter. Though reckless fund raising by companies in a ‘big hurry,’ can reduce the ultimate upside. Finding a motherload, is finding a motherload. If someone is short – as we detail with three examples in our report who went up an average of 2000% in a few years – any shorts are done. As in toast.
Finally if the offering closes as contemplated, it means Sprinter is expected to become Fairchild’s largest shareholder. So we can fully assume they did a serious amount due diligence.
We don’t know much about Sprinter. But we may soon..
Official Address / Location: According to Canadian securities regulations (under National Instrument 62-103), because this transaction may trigger an “Early Warning Report” (if Sprinter acquired more than 10% of the company), Sprinter’s exact legal registry address and principal office will be publicly filed.
Where to find the document: Once the first tranche of the private placement closes, the complete Early Warning Report containing Sprinter LLC’s official legal address, corporate jurisdiction, and signing officers will be posted publicly under Fairchild Gold’s profile on the Canadian regulatory filing database SEDAR
Report: Fairchild Gold Corp (FAIR) $0.04. Proven Ground Mining.
Management Discussion and Analysis
Certain information contained in this news release constitutes “forward-looking information” or “forward-looking statements” (collectively, “forward- looking information”). Without limiting the foregoing, such forward-looking information includes statements regarding the Company’s business plans, expectations and objectives, and not limited to the closing of the Transaction and receipt of all necessary approvals. In this news release, words such as “may”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate” and similar words and the negative form thereof are used to identify forward-looking information. Forward-looking information should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking information is based on information available at the time and/or the Company management’s good faith belief with respect to future events and is subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company’s control. For additional information with respect to these and other factors and assumptions underlying the forward-looking information made in this news release, see the Company’s most recent Management’s Discussion and Analysis and financial statements and other documents filed by the Company with the Canadian securities commissions and the discussion of risk factors set out therein. Such documents are available at www.sedarplus.ca under the Company’s profile and on the Company’s website, https://fairchildgold.com/. The forward-looking information set forth herein reflects the Company’s expectations as at the date of this news release and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law. Revelers Media an associated firm of Institutional Analyst and Institutional Gold Analyst to has been hired by the Company to build a news related website to disseminate news and SEDAR filings for a monthly retainer of five thousand dollars per month. It will further negotiate for an equity stake in the company.
