TORONTO (miningweekly.com) – A new crowdfunding platform is aiming to revolutionise mine financing in giving individual and institutional investors access to participate in security offerings of mining companies, which are usually restricted to a select few high net-worth people, institutional investors, friends and family.

“It’s about reducing the barriers for investors. We are democratising the mining investment stage, by providing investors with a 24/7 one-stop shop platform through which we simplify the investment process,” president and CEO Chad Williams tells Mining Weekly Online in an interview.

He explained that owing to the high-risk nature of mining investment, especially in the junior segment, financial advisers were often prohibited to recommend investments in this capital-starved sector of the mining industry. Compounding matters was the fact that large financial institutions often pushed their own products instead of these riskier investment opportunities.

Williams noted that mining companies using the Klondike Strike online investment platform to raise capital were committed to transparency and provided clear and current information to investors through making available an ‘offering memorandum’ – a light version of a prospectus – which provided ample information and communicated their corporate objectives.

“Investors become part of a revolution in the mining industry and how it accesses capital. This is an opportunity to support mining companies as they execute on their business plans, and be actively involved in one of the most important sectors in the global economy,” Williams noted.

According to Klondike Strike VP of marketing and investor relations Katherine Fedorowicz, the simplified investment process had expanded the range of potential investors for issuers in Canada from about 1.4-million accredited investors to more than 26-million.

“Klondike Strike is a secure online investment platform for the mining industry which enables investors to directly participate in security offerings of mining companies. It facilitates online communication and connectivity between investors and mining companies, reducing previous investment barriers,” she advised.

The financing platform was operating under the new ‘offering memorandum’ exemption in Ontario, and was subject to all applicable securities laws in the rest of Canada.

FIRST ISSUERS

After just more than ten days live, the Klondike Strike platform had attracted two gold juniors in need of funds. Banyan Gold, which was exploring and developing its flagship Hyland gold project, in the Yukon, had launched a $750 000 offering of up to a maximum of 8.33-million shares in the corporation at C$0.09 each.

Radisson Mining Resources also approached the platform with a C$1-million offering comprising 6.67-million units priced at C$0.15 apiece. Each unit comprised one common share and one half of a purchase warrant. Each full warrant would entitle the holder to buy a common share at a strike price of C$0.20 apiece for 18 months from the date of issue.

Radisson is a Quebec-based mineral exploration company promoting the O’Brien project, which was cut by the regional Larder-Lake-Cadillac Fault.

“It is coincidental that the first two companies to list are gold focused; diverse companies have expressed interest in our platform,” Williams said.

Meanwhile, Klondike Strike was working on adding additional attributes to the platform, which could comprise small-scale debt financing of between C$2-million to C$5-million, metals streams, flow-through shares and property arrangements, Williams advised.

“We are like a mining matchmaker service with the added benefit of performing and providing investors with due diligence by our team of mining and finance professionals, which has more than 90 years of accumulative mining experience. Investors have the opportunity to directly invest in security offerings of mining companies benefiting from the favourable terms these offerings commonly entail,” Williams stated.