Freyja Resources (CVE:FRA) is well on its way to advancing its Las Cristinas project in Mexico to production stage, raising almost $2 million in new funds and announcing exploration results that have exceeded expectations, with Freyja insiders so convinced of the potential that they have chosen to increase their stake in the company to 17%.
Indeed, insiders of the junior explorer, including board and management, have invested over $250,000 in the recently completed financings and now own 5.5 million of Freyja’s 32.4 million issued and outstanding shares, for an approximate 17% total interest. Chairman Alain Lambert invested close to $100,000 in the latest financings, while president and CEO Andre St Michel participated $87,000.
Shares of Freyja have surged over 66% year-to-date, currently sitting at about 20 cents.
“There are too many executives of small companies that are there to take money out, which is usually a red flag,” says Lambert in a recent phone interview with Proactiveinvestors.
“Our board sat down to look at our financing plans, and we decided that the first money in should be from management.
“If management doesn’t own stock, why would outside investors do it?”
Lambert says the question of insider investment always gets raised, particularly at the latest annual PDAC mining conference in Toronto last week, where many junior miners troll the aisles in the hopes of attracting new investors.
“The chairman and CEO were the largest investors in this latest placement, and every director invested as well. This means we are committed to the company and its future success, and are aligning ourselves with the investors.”
Earlier this week, Freyja closed three separate financings, raising a total of almost $2 million, which will help the company with its goal of becoming a copper and silver producer from its flagship Las Cristinas project in northern Mexico. The first financing was a $1.02 million share exchange agreement with UK-based Global Resources Investment Trust, while the second was a unit offering, including the issuance of 1.83 million units at a price of 17 cents apiece, for total proceeds of $310,517. Finally, the third financing was a debenture offering, with Freyja issuing a total of 750 debenture units at a price of $820 each, for total funds of $615,000.
The Canadian junior explorer saw some big gains last month after the company announced the results from its initial sampling program completed last year on its Las Cristinas project, which it is planning to take to production by the end of 2014. The channel sampling program, which focused on the southern end of the Mexican property, comes ahead of a planned 3,000 metre drilling program at the site, which is expected to begin later this month following the receipt of necessary permits.
The initial results wowed investors, with the company’s stock surging over 25% on grades as high as 17.95% copper and 429 g/t of silver.
Freyja followed up these results with further sampling on the northern extension of the property, to prove the anomaly and confirm the mineralized zone. The follow-up work not only confirmed the extension further than previously thought to a total length of 450 metres, but also provided evidence that the width of the anomaly reaches up to 120 metres.
The company’s goal is to generate cash flow from initial production to then fund a more in-depth exploration program. The purpose of the channel sampling has been to give Freyja a clear indication of how it needs to plan its next phase of exploration. The main aim of 3,000 metre drilling program will be to delineate the initial open pit production area.
The Las Cristinas project consists of four mineralized zones, and the southern end of the property was the centre of small scale copper production in the early 1970s.
