Lawrence Raulston on Newstrike
Newstrike Capital NES.V
Outlining Resource
Gold
2a = Accumulate
Newstrike Capital (NES-TSXV: $0.375)
has completed the first tranche of a private
placement and issued 9,145,000 units at a
price of 40 cents per unit (share and half
warrant at C$0.80 for 18 months) for
C$3,658,000. The second tranche compris-
ing the remaining 3,335,000 units is
expected to close soon. Proceeds will be
used to drill the company’s property in the
Guerrero Gold Belt in Mexico.
A recently acquired portion of that prop-
erty, known as Ana Paula, was drilled by
another company with highly encouraging
results. Based on the work to date, and
with favorable results, Newstrike should
be able to outline a substantial resource in
this round of drilling. Newstrike made a
bid to acquire a 21% interest in a nearby
property, but was outbid by another
company that paid C$52 million cash for
the 21% interest. Newstrike received a
C$2 million break fee as part of that deal,
adding to its cash position. An aggressive
drilling program is planned, with multiple
drills devoted to outlining a resource at
Ana Paula as well as testing other target
areas on the extensive property.
