B2Gold (TSX: BTO) has upped its investment in Founders Metals (TSXV: FDR) to maintain its 5% shareholding, in response to the recent announcement of a C$30 million bought deal financing by Founders.
Through the exercise of its investor rights, B2Gold has bought an additional 484,239 common shares of Founders at a price of C$5.30 each, for approximately C$2.57 million. The stock traded at C$5.20 at the time of the announcement, adding to the 320% gain it has recorded over the past year. The Canadian gold junior has a market capitalization of approximately C$467 million.
Prior to the financing news, BMO announced that it was initiating coverage of Founders, giving it a C$7.50 target price at an outperform rating based on a conservative valuation for an assumed open pit at its flagship Antino project in Suriname.
Together with the overallotment option granted to the bought deal underwriters led by BMO Capital Markets, Founders could raise as much as C$37 million for the Antino project, where it has been drilling since 2023 and delivering good results, highlighted by the high-grade discovery of 17.8 metres grading 5.68 grams gold per tonne in January.
“We’re pleased to have B2Gold’s ongoing support; their investment in Founders is a strong endorsement of what we have accomplished to date and the Tier 1 potential of Antino,” Founders CEO Colin Padget said in a press release.
B2Gold became a shareholder in Founders last October through a C$12.1 million investment.
Promising gold project
The Antino project is in the heart of the Guiana Shield, an underexplored region in the Americas hosting gold deposits with combined resources exceeding 110 million ounces. Notable projects in the area include Newmont’s (TSX: NGT) Merian and Zijin Mining’s Rosebel gold mines.
Located across the Lawa River from French Guiana, the 200-sq.-km Antino project has a long history of artisanal gold production, with some 500,000 ounces of reported production. Guided by 32,000 metres of drilling by past owners, Founders has planned its drilling on expanding the known gold mineralization and testing other highly prospective targets on the property.
This year, the company is fully funded for 60,000 metres of drilling.
So far, the Founders team appears to “have made a high-margin gold discovery at its Antino project,” BMO analyst Andrew Mikitchook wrote during the bank’s coverage.
“In our opinion, there is a scarcity premium globally for quality new discoveries to replace existing steadily depleting operating mines,” Mikitchook said.
“Our initial development placeholder assumptions suggest a 290,000-oz.-per-year development scenario for Antino, firmly placing it among the scale and style of deposits sought by investors and in many cases acquired by established operators.”
According to the company’s latest investor presentation, the analyst consensus is that Antino has the potential to contain between 5 and 10 million ounces of gold.
