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A worker places gold coins on display at Hatton Garden Metals precious metal dealers in London on July 21, 2015.Neil Hall/Reuters

Canadian gold miners have reason to rejoice. As the precious metal's price pops on the back of Brexit-induced market chaos, and as investors flock to so-called safe havens, junior developers and producers are finding a rare window to raise desperately needed money.

They aren't wasting any time. On Monday, six gold companies rushed to tap investors for fresh funds: Guyana Goldfields Inc., Orezone Gold Corp., Osisko Mining Inc., TMAC Resources Inc., Lundin Gold Inc. and Sandstorm Gold Ltd. Within hours of launching, the size of two of the deals increased on the back of heavy investor demand.

Guyana Goldfields set out to raise $110-million to fund an expansion of its Aurora gold mine, but it quickly boosted the financing to $130-million. Orezone Gold had plans to raise $20-million and has already increased the deal size to $23-million.

The financings follow a steady trickle of gold deals in the past few weeks for companies such as Endeavour Mining Corp. and Richmont Mines Inc. Since January, the bullion price has jumped 25 per cent and that rise has given investors more confidence to invest in select miners. Gold has climbed 5.4 per cent higher since the Brexit results late on Thursday, closing on Monday at $1,324 (U.S.) an ounce.

Buyers who got in early to recent deals have already been rewarded, giving reason to invest in Monday's offerings. Richmont's deal was sold at $10.40 (Canadian) a share and the stock is now trading at $11.97, a 15-per-cent rise. Endeavour's deal was issued at $20 a share and the stock is now worth $21.56, an 8-per-cent rise.

The risk, of course, is that the gold price's climb will be temporary. Global investors are skittish after Britain voted to leave the European Union, and in scary times they flock to supposed safe havens such as bullion. But they won't forget that gold was capable of losing one-third of its value in less than a year in 2012 and 2013, and it is unclear whether the current rally is temporary. The hype could be short-lived.

Of Monday's deals, Guyana Goldfields was the largest. Given the company's recent track record, it makes sense that investors are willing to pony up more cash. The stock is up more than 200 per cent since Jan. 1, which was when the miner declared commercial production.

Guyana Goldfields is known for its high-grade gold – its most recent feasibility study in January assumes 2.94 grams a tonne – and its Aurora mine is expected to last 16 years.

During its first quarter of commercial production, the miner produced 41,281 ounces, generating $18.3-million (U.S.) in free cash flow. The company is expected to produce between 130,000 and 150,000 ounces of gold this year.

In total, gold minders raised $405-million on Monday. BMO Nesbitt Burns led or co-led three of the offerings, while National Bank Financial co-led two of the deals. GMP Securities and Canaccord Genuity, both independents, each led one deal.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 0:37pm EDT.

SymbolName% changeLast
EDV-T
Endeavour Mining Corp
+1.27%27.81
LUG-T
Lundin Gold Inc
+2.28%19.32
OSK-T
Osisko Mining Inc
+2.94%2.8
SSL-T
Sandstorm Gold Ltd
+1.86%7.12

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