South32 ups investment in American Eagle Gold

[Ben Graham]

Australia’s South32 (ASX: S32) has exercised its top-up right to maintain a 19.9% interest in American Eagle Gold (TSXV: AE) (OTCQB: AMEGF) with the purchase of an additional 1.16 million shares.

The exercise follows American Eagle’s recent issuance of 1 million shares to complete its option to acquire 100% of the NAK copper-gold project in central British Columbia.

The stocks purchased by South32 were initially issued as charity flow-through shares priced at C$0.71 each, which the Australian miner will then buy off the subscriber at a discount, as per an investor rights agreement when it first invested in American Eagle last November.

American Eagle’s stock was trading at C$0.48 as of 11:25 a.m. ET, at the lower end of its 52-week range of C$0.38-C$1.07. The Toronto-based junior has a market capitalization of C$82.7 million.

“South32’s continued support speaks to the quality of the NAK project and the work our team has done,” commented Anthony Moreau, CEO of American Eagle, in a press release Thursday.

The now fully-owned project, situated within the Babine copper-gold porphyry district, has been explored by the American Eagle team for over three years, during which its drilling campaigns have resulted in significant high-grade mineralization.

Before that, the property has only been explored to shallow depths during the 1960s. The historic work revealed a large near-surface copper-gold system that measured 1.5 km x 1.5 km, serving as the foundation for American Eagle’s subsequent exploration.

Drilling is expected to continue this year to grow the size and grade of the NAK deposit, the company said.