Silver Crown Royalties soars to new high on Gentile investment

[Ben Graham]

Silver Crown Royalties (Cboe: SCRI) soared to an all-time high on Tuesday following a C$3 million ($2.2 million) investment from Michael Gentile, a prominent investor in the junior mining sector.

In a statement, the silver royalty company said Gentile has purchased 424,500 units, each consisting of one common share and a share purchase warrant, at a price of C$7 per unit. The shares traded at C$8.51 each at Tuesday’s open, before surging over 25% to C$10.74 apiece. By midday, Silver Crown’s stock eased to around $10.20, with a market capitalization of C$38.6 million ($27.8 million).

In addition to his investment, Gentile will also serve as the company’s strategic advisor, a position he currently holds with several mining companies.

“Michael’s deep industry knowledge and contacts should serve the shareholders of Silver Crown in the near-term with an expected lower cost of equity capital,” stated Peter Bures, CEO of Silver Crown. Gentile, as co-founder of Montreal-based hedge fund Bastion Asset Management, is the largest shareholder in over 25 junior miners.

Favorable silver environment

According to Silver Crown, the proceeds from Gentile’s investment will be allocated primarily toward specific accretive silver royalties as well as general working capital. Bures said that this funding would help the company expand its portfolio and “capitalize on the favorable outlook for rising silver prices.”

Silver rose to a new peak on Tuesday at just north of $89 an ounce. So far this year, the metal has gained nearly 12%, outperforming most commodities.

Silver Crown currently holds royalties on five properties across Canada and Latin America. These include PPX Mining’s Igor mine in Peru, Pilar Gold’s PGDM in Brazil and the Scotia mine in Canada being developed by EDM Resources.