American Eagle Gold’s NAK drilling program Credit: Henry Lazenby at The Northern Miner
Eric Sprott is backing British Columbia-focused junior American Eagle Gold (TSXV: AE) with a C$23 million ($16.8 million) investment for a 9.9% equity stake.
In a statement on Friday, American Eagle said the Canadian billionaire acquired 19.2 million common shares of the company, issued on a premium flow-through basis at a price of C$1.20 per share.
American Eagle Gold’s stock closed Friday’s trading session up 22% to C$0.94 apiece following the announcement, bringing the Toronto-based explorer’s market capitalization to nearly C$163 million ($119 million).
“We’re very pleased to welcome Eric Sprott as another strategic, long-term investor on the register. What makes his participation particularly notable is that it’s rare for him to back copper stories,” Anthony Moreau, CEO of American Eagle, stated in a press release.
Sprott joins Teck Resources (TSX: TECK.A/TECK.B) and Australia’s South32 (ASX: S32) as a third strategic investor in the company. To accommodate Teck and South32’s investor rights to maintain their ownership, American Eagle has arranged a separate financing comprising approximately 14.93 million shares priced at C$0.77 per share, for proceeds of C$11.5 million.
Cash for further drilling
Together, the financings would provide American Eagle with C$34.54 million in capital to further explore its flagship NAK project, located in the Babine copper-gold porphyry district of central BC. Upon closing , the company will have over C$50 million in cash on its balance sheet and will be fully funded for substantial drill program expansions in 2026 and 2027, it said.
The NAK property is host to a large 1.5 km x 1.5 km system that was previously tested at shallow depths during the 1960s. In 2022, American Eagle took over the project and has since conducted multiple drill programs, confirming significant, continuous mineralization deeper beneath the surface.
The project is currently undergoing a 31,500-metre drill program aimed to further expand and improve the mineral footprint, with assays being released as they are available.
The most recent results, which came the same day as the Sprott investment, were highlighted by an interval of 618 metres grading 0.77% copper equivalent, linking high grade, at-surface gold-rich mineralization to high-grade core at depth. This, the company said, supports the concept of a large, coherent mineralized body extending from surface to significant depth.