It Works Eh! Canadian Junior Miner Raises 400K From Crowdfunding

0

Although the mining sector is a little late to the crowdfunding party, Canadian investors appear to be slowly embracing the new innovative funding concept as one Quebec junior mining company has been able to raise more than $400,000 in just over a month.

Radisson Mining Resource (TSX.V: RDS) was one of two initial Canadian-based gold mining companies listed on  Red Cloud Klondike Strike, described as the  first regulated equity crowdfunding platform for the sector. Friday, Radisson Mining announced the closing of the first tranche of its private placement funding through the site, valued at CAD$402,510.30. In total, the company is hoping to raise $1 million and is now launching the second half of its placement, which will close June 6.

The proceeds of the crowdfunding will go towards the development of the company’s O’Brien project located in Northern Quebec within the Abitibi gold belt.

“I think you can say it has been a mixed bag,” said Mario Bouchard, chief executive officer for Radisson Mining describing the experience of using technology to tap into new funding potential. ‘”We are extremely happy with the results but it has been a lot of work to promote the new platform.”

Bouchard, along with members of Red Cloud and the second inaugural company listed on the platform Banyan Gold Corp, (TSX.V: BYN), spent a month touring Canada to promote the new mining-specific crowdfunding site.

“We saw a lot of interest in the platform but I think a lot of investors are still in a ‘wait and see’ mode. It is going to take time for the platform to build traction but we are confident it will continue to growth,” said Hubert Parent-Bouchard, director of finance at Radisson. “However we can say that this idea works.”

Radisson’s chief agreed that the company was able to raise almost half of its total goal in just over a month, demonstrating just how much potential there is for this new funding concept.

Although investment capital is slowly coming back to the mining sector, Bouchard said that it can still be difficult for junior miners to raise funds and that there is still a “void” in the marketplace that Klondike Strike is trying to fill.

While Bouchard doesn’t see crowdsourcing completely overtaking traditional funding avenues anytime soon, he does see it as a complimentary process, especially for cash-starved small cap companies.

“As Klondike Strike continues to fill this niche, I think it is going to get easier for smaller companies to get the funding they need,” he said.

Although Radisson still has to find investors for the final tranche of the private placement, they are confident that they will reach their ultimate goal, especially as gold prices continue to push higher.

“We have shown that this is a viable funding source for companies and now that we have reached a certain funding level we are expecting to attract other investors,” said Parent-Bouchard.

Currently, Klondike Strike is only available to Canadian investors because of regulatory hurdles in other jurisdictions like the U.S. However, Chad Williams, president and chief executive officer of the company, said in an initial interview with Kitco News that he sees potential for a global platform.

The second miner listed on the platform, Banyan Gold, is looking to raise $750,000. GoviEx Uranium Inc., listed on the Canadian Securities Exchange (GXU), is the third company to be listed on the platform. The company is looking to develop a Uranium project in Niger and raise $2 million.