Premium Exploration, Inc. (TSX-V: PEM) cancelled its proposed private placement announcement for select investors as it continues to time the gold market for "appropriate opportunities." The company had announced to make the financing available to investors in February, according to an Accesswire report.
The precious metals exploration company initially announced that it would be offering non-brokered private placement for up to 5,000,000 units of the company for fundraising in February. The company aimed to raise $1,000,000 then, at a cost of $0.20 per unit, the company said in its February news release.
Units were composed of one common share and one-half of the share's purchase warrant. Whole warrants would allow holders to buy more company shares for $0.30 a piece over the next 18 months, following the date they were issued.
In March, Premium Exploration revealed it would re-price its private placement pricing as it increases its offering to 6,666,667 units, according to the company's news release. The company brought down subscription prices to $0.15 per unit. Units would also come with a full warrant that sells at an exercise price of $0.25.
The company also reduced the exercise price of 8 percent of the finder's warrants-for units placed by approved investors-to $0.25 for an 18-month period from $0.30. The company did not change its 8 percent commission rate for cash finders.
The company aimed to use proceeds from the private placement for additional capital and to further its district sized Idaho Gold Project.
Spot gold prices soared to a two-week high of $1309.50 an ounce earlier this month, reversing speculations and bearish sentiments, Money Morning reported. The report also noted that the yellow metal has also increased by 8 percent year to date.
Recent industry forecasts, however, revealed that gold would be in bearish territory by the end of the year.
In November, noted hedge fund manager John Paulson of Paulson & Co. said he "wouldn't personally invest more money in his gold fund," an unnamed source told Bloomberg. Paulson is known as a firm-believer in the bullion's ability to hedge against losses brought on by inflation, Bloomberg reported.
Goldman Sach's Jeffrey Currie, who once predicted bullion prices along with SocGen commodities research head Michael Haigh, also believed that forecasts weren't rosy for gold this year. Prices will plunge to $1,050 over the next months, Currie said in a report.
Market Oracle, on the other hand, forecasted that while gold may not rebound to a whopping $1,900 per ounce, it's impossible for the yellow metal to drop to $1,000. The website noted that "demand from central banks as well as Asia" will buoy gold prices over $1,100 even if the yellow metal closes below the $1,200 mark.
Market Oracle also warned against following Goldman Sach's recommendations. Based on a Money Morning report, the website accused Goldman of manipulating gold prices so it could "buy gold at lower prices and sell gold at higher prices."
Market Oracle said that Goldman bought 3.7 million shares of the SPDR Gold Trust-amounting to $500 million-at a time when it was encouraging investors to sell gold last year.
In related news, Barrick Gold Corp. (NYSE:ABX) chairman Peter Munk maintained that he still finds it "impossible" to forecast gold prices. "I have been in the business for 30 years, and it occupies my mind day and night," he told Bloomberg on Thursday.
Promising Assay Results
Premium Exploration provided positive assay results from ongoing drillings at the upper gold zone of its Friday Gold Deposit in March, according to the company's news release. The results will be used to support the company's preliminary economic study on the high grade mining potential of its Idaho Gold Project.
Results revealed high grade gold mineralization present under a dacite dike in silicified rocks at a vertical zone drill covering 6 to 18 meters in widths. Gold were discovered in veins and disseminated pyrite with quartz monzonite and mica schist in the area, the news release said.
The drill holes were the said assay results were taken strategically lie at -45 degrees east of the deposit, on the eastern edge of the Orogrande Shear Zone.
The company is awaiting assay results for the other drill holes completed onsite from the ALS Chemex Laboratory (ISO 9001: 2008) in Elko, Nevada. The laboratory provides the assay results and geochemical analysis of the samples extracted by Premium Exploration from the Friday-Petsite project.
"In my opinion, these results continue to support a mineable resource at the Friday deposit," said Premium Exploration president and CEO John Ryan in the news release. "We look forward to receiving the remainder of the assay results and moving this project forward," he added.
In January, the company reported discovering 2.69 grammes per tones (g/t) of gold over 151 meters (496 feet) at its Friday Gold Deposit, according to Accesswire. Other highlights of the announcement include the discovery of 5.62 g/t over 54.1 meters (177.5 feet), and 15.19 g/t of gold over 9.14 meters through the PFR20013-1 drill hole.
The Idaho County Site bears "all the signs of a gold district" according to a report on Investing.com. The site covers over nine priority targets that include Baner, which was reported to have a multi-million oz potential, and Spotted Deer, which covers a high grade zone. The site also features more than 20 prospects.
Premium Exploration's current objective is to expand its resource base in its Idaho County Site, which include the Deadwood Zone, the Buffalo Gulch Deposit and the Friday-Petsite Deposit, within the context of a possibly bearish gold market.
The company recently sold its Bennett Lumber Company Mill Site and Red Elk Group of claims consisting of 13 patented mining claims to New Jersey Mining Company for $425,000. The property covers 220 acres in Elk City, Idaho.
"This sale provides us with a much needed dose of fresh capital which we intend to use for reducing accounts payable and working capital. I think it is a win-win for both parties," Ryan said in a news release posted on the company's website last week.
Premium Exploration's stocks traded at a value of $0.0450 on Friday. Its trading volume reached 436,682 on the same day.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.