Strong Investor Demand Pushes Oversubscribed Private Placement Beyond Target

Source: Streetwise Reports 11/07/2024

Tectonic Metals Inc. (TSXV: TECT; OTCQB: TETOF; FSE: T15B) announced the successful closing of its private placement, which was significantly oversubscribed, raising CA$5,349,171. Read more to find out how this oversubscribed funding round exceeded expectations and what it means for Tectonic’s future projects.

Tectonic Metals Inc. (TSXV: TECT; OTCQB: TETOF; FSE: T15B) announced the successful closing of its private placement, which was significantly oversubscribed, raising CA$5,349,171. This amount surpassed the company’s initial target. Initially announced on October 4, 2024, this extension raised an additional CA$1,691,712 through the issuance of 28,195,200 units priced at CA$0.06 per unit. This total combined the funds from the second tranche with those from the initial tranche and previous offering rounds.

Each unit in the placement includes one common share and one-half of a common share purchase warrant, with each full warrant exercisable at CA$0.10 until two years from the offering’s close. LIFE units from the offering are freely tradeable, while non-LIFE units are subject to a four-month hold period. In this latest tranche, CA$591,708 was generated through LIFE units, with 9,861,800 common shares and 4,930,900 warrants issued, while HOLD units contributed CA$1,100,004, resulting in the issuance of 18,333,400 common shares and 9,166,700 warrants.

Finder’s fees in cash totaling CA$98,143 were paid to Canaccord Genuity Corp., Haywood Securities Inc., Ventum Financial Corp., Roche Securities Ltd., Gerhard Merkel, and Black Oak Ventures Ltd. Additionally, Tectonic issued 1,635,714 non-transferable common share purchase warrants to these finders, each exercisable at CA$0.10 until November 1, 2026. The cumulative finder’s fees for both the extended and initial offerings amount to CA$226,029, with 3,767,153 finder’s warrants issued. This private placement was approved by the TSX Venture Exchange (TSXV).

Why Gold?

On October 29, Kitco Media’s Gary Wagner reported on gold nearing US$2,800, attributing this surge to a mix of “geopolitical conflicts, Federal Reserve interest rate normalization, and strong demand from global central banks.” This combination, which Wagner referred to as a “perfect storm,” has pushed gold prices up by approximately 35% this year. Emerging market central banks have notably increased their gold reserves as part of a strategic shift away from the U.S. dollar, adding further support to the metal’s robust price performance.

Further insights from LiveMint on October 30 revealed a strong performance in the gold sector, with MCX gold rates surging in India. This was partly fueled by cultural factors and a rise in retail demand. Chintan Mehta, CEO of Abans Holdings, emphasized gold’s safe-haven appeal, stating, “Gold stands out in times of uncertainty . . . a complete safe-haven unlike silver.” Despite potential near-term dips, Mehta suggested that such declines would present valuable buying opportunities amid continued demand for gold.

In a November 4 report, Egon von Greyerz, founder of VON GREYERZ AG, highlighted the consistent historical role of gold as a protective asset. He took particular note of gold’s rise in times of financial instability. He observed, “Gold doesn’t lie…an ounce of gold in 1923 was worth 87 trillion Marks,” underscoring gold’s resilience during currency devaluations. He further anticipated that gold’s journey was “only starting now,” driven by the ongoing devaluation of fiat currencies.

Tectonic’s Catalysts

The capital raised through Tectonic’s private placement aims to support exploration and development at the company’s Flat Gold Project in Alaska, a promising district-scale opportunity for open-pit heap leach gold mining. As outlined in the company’s October 2024 investor update, Tectonic has prioritized “economic mine” criteria, highlighting heap leach processing potential, high gold recovery rates, and infrastructure access through on-site airstrips and nearby river barge routes, which reduce logistical costs.

The company’s exploration strategy benefits from strong partnerships and technical expertise, particularly its milestone partnership with Doyon Limited, Alaska’s largest private landholder, and Crescat Capital, which together hold significant ownership in Tectonic. Additionally, Tectonic’s technical team has established a 100% drill success rate at the Chicken Mountain target, identifying zones of gold mineralization and potential higher-grade starter pits. According to Tectonic’s October 2024 presentation, the company’s “disciplined, upfront de-risking strategy” aims to secure long-term value and sustainable operational progress at the Flat Gold Project.

Analysts Talk Tectonic

*Technical analyst Clive Maund strongly endorsed Tectonic Metals Inc., rating it an “Immediate Strong Buy” on October 4. Maund emphasized the potential for “spectacular gains” as Tectonic’s stock showed clear signs of a bullish reversal. He noted a “giant Double Bottom base pattern,” indicating a rally from lows, supported by an “exceptionally positive volume pattern” and a strengthening Accumulation line, both bullish signals. [OWNERSHIP_CHART-10225]

Maund also highlighted Tectonic’s Flat Project, noting its substantial scale and favorable mining conditions, especially within the Chicken Mountain Intrusion, where all 74 drill holes intersected gold mineralization, hinting at a “big resource.” Additionally, Maund remarked on Tectonic’s strategic partnerships. These include Doyon Ltd., which holds nearly 10% of the company’s stock, underscoring strong local support and shareholder stability. These factors contributed to his confidence in the stock’s growth potential, concluding that the current price represented a strong entry point.

Ownership and Share Structure

Institutions hold around 32.3%. Doyon Ltd has 9.9% and Crescat Capital has 22.3%. 15% of Tectonic is held by insiders and other institutions.The rest is retail.

Tectonic has a market cap of US$16.92 Million with 342.61 Million Free Float Shares. Their 52-week range is US$0.045 – 0.17

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Important Disclosures:

1. Tectonic Metals Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Tectonic Metals Inc.
3. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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* Disclosure for the quote from the Clive Maund article published on October 4, 2024

1. For the quoted article (published on October 4, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$2,500.
2. Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing the article quoted. Maund received his UK Technical Analysts’ Diploma in 1989. The recommendations and opinions expressed in the article accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed

Clivemaund.com Disclosures

The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks cannot be only be construed as a recommendation or solicitation to buy and sell securities.

( Companies Mentioned: TSXV: TECT;OTCQB: TETOF;FSE: T15B, )

Source: https://www.streetwisereports.com/article/2024/11/07/strong-investor-demand-pushes-oversubscribed-private-placement-beyond-target.html