Altaley Mining Corporation (TSX-V:ATLY) announced that its board of directors has approved a consolidation of its share capital on a ratio to one new post-consolidated share for every eight pre-consolidated shares, in addition to a rights offering for gross proceeds of up to $16 million.
The company said in a statement its board of directors determined the consolidation was necessary for it to raise additional capital and seek new business opportunities.
Altaley currently has 278,944,422 issued and outstanding common shares and on completion of the consolidation, it expects there to be approximately 34,868,052 issued and outstanding common shares, subject to rounding. The company’s name and trading symbol will remain the same.
Proposed rights offering
The company said its planned post-consolidation rights offering for net proceeds of up to $16 million will be used for operating and capital expenditures in connection with the construction and commissioning of the Tahuehueto Gold Mine Project, general corporate and administrative costs, and settlement of working capital deficiency.
Under the rights offering, every registered shareholder of the company who is a resident in Canada as of the close of business on the record date will receive 0.95598496 of one right for every share held for the issuance of a total of 33,333,333 rights.
One right will permit the shareholder to purchase one unit at a price of $0.48 per unit.
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The company said each unit will consist of one share and one-quarter of a transferable share purchase warrant, which entitles the holder to purchase an additional share at a price of $0.75 until 1.30pm Pacific Time on the date 30 months from the closing date of the rights offering.
If the rights offering is fully subscribed, Altaley said it will issue up to 33,333,333 new shares and warrants to purchase up to an additional 8,333,333 shares.
If the rights offering is fully subscribed and all the warrants issued on closing of the rights offering are exercised, the additional proceeds to the company from the exercise of the warrants will be $6,250,000, the company said.
Full details of the share consolidation and rights offering can be found here.
Altaley Mining is a Canadian-based mining company with two 100% owned Mexican gold, silver, and base metal mining projects.
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