Cavalier’s (ASX:CVR) gold bet: A streamlined approach to production
February 20, 2025Cavalier Resources (ASX:CVR) is making a strategic play that could see its Crawford Gold Project emerge as a new production hub—without the dreaded shareholder dilution.
The company has inked a non-binding term sheet for US$11 million (A$17.5 million) in stream financing with Raptor Capital International, a precious metals streaming fund known for backing near-term producers.
In an era where junior explorers are scrambling for capital, Cavalier Resources financing approach is a notable departure from the usual dilution-heavy equity raisings.
Instead, the company has opted for a non-dilutive funding route that could provide a fast track to production at its Crawford Gold Stage 1 open pit.
A Different Way to Fund Gold Mining
The concept of stream financing is simple but effective.
In exchange for upfront cash, the financing partner secures rights to a portion of future gold production. In Cavalier’s case, Raptor will receive one ounce for every 3.25 ounces produced, up to a total of 11,000 ounces.
It’s a strategy that has been successfully employed by larger players but is less common among ASX juniors.
Paul Ray, CEO of Raptor Capital International, sees Cavalier as an ideal candidate for this type of funding.
“Cavalier’s preference to proceed with a streaming option falls in line with our own corporate mandate—to provide a non-dilutive funding option to near-term mining projects that are led by experienced mining teams with previous runs on the board,” he said.
For Cavalier, the key benefit is obvious: keeping equity intact while securing the funds to bring Crawford into production.
CEO Daniel Tuffin views it as a pivotal step.
“The signing of this non-binding US$11 million term sheet with an international gold streaming fund in Raptor marks yet another significant milestone as we enter into the next exciting phase for the Company and our loyal shareholder base,” he said.
Gold Price Windfall
Timing is everything in the gold sector, and Cavalier may have struck gold—figuratively speaking—with this deal.
With gold prices at record highs, the economics of the Crawford Project are increasingly compelling.
A sensitivity analysis in the company’s PFS (Pre-Feasibility Study) showed that at a gold price of A$4,500 per ounce, the project’s net present value (NPV8) would jump to A$48.4 million, with an internal rate of return (IRR) of 447%.
Even at the base-case gold price of A$2,900 per ounce, the NPV sits at A$14.8 million with an IRR of 122.9%—figures that should turn heads among investors looking for high-margin gold plays.
Due Diligence & The Road Ahead
Of course, there are still hurdles to clear.
The funding agreement remains non-binding and subject to a 60-day due diligence process.
Raptor’s technical team has already completed an initial review, but both parties will now need to finalise the terms before a definitive agreement can be reached.
Cavalier is also awaiting final mining approvals, which will be critical in ensuring that production can commence without further delays.
But with a financing deal in the works and a favourable gold price backdrop, the pieces are falling into place for the company’s transition from explorer to producer.
Final Word
Cavalier’s move to secure non-dilutive funding through a streaming deal sets it apart from the typical junior gold narrative.
If all goes to plan, it could mark a turning point—not just for the company but for how ASX-listed gold juniors approach funding in a market where equity dilution is often a necessary evil.
With gold prices on a tear, Cavalier’s bet could pay off in more ways than one.
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