G Mining Ventures is set to get close to $22 million through Franco Nevada’s warrant exercise.
The gold mining company said that Franco-Nevada Corporation (TSX:FNV) has agreed to exercise 11.5 million common share purchase warrants in the company, which were issued as part of the financing for the Tocantinzinho gold project in Brazil.
The exercise is expected to be completed by December 4, bringing gross proceeds of $21.85 million to G Mining Ventures.
The warrants entitle Franco-Nevada to acquire 0.25 of a common share of G Mining Ventures at an exercise price of $1.90 per quarter-share, equivalent to $7.60 per full share.
Initially set to expire in July 2027, the warrants were accelerated due to a recent surge in G Mining’s share price. Under terms of the agreement, G Mining could accelerate the expiry if its shares maintained a volume-weighted average price above $12.00 for 10 consecutive trading days, which was achieved at the end of October.
"We are pleased to announce this warrant acceleration and exercise, a testament to GMIN's commitment to delivering shareholder value, underpinned by our successful execution of the Tocantinzinho mine construction and strict capital discipline," said Louis-Pierre Gignac, CEO of GMIN.
"We deeply appreciate Franco-Nevada's steadfast support and confidence in our vision. Their partnership was instrumental in achieving the milestone of TZ's first gold pour and reaching commercial production in 2024, on schedule and within budget."
Franco-Nevada initially invested $352.2 million in G Mining’s Tocantinzinho project, including a $27.5 million equity investment, a $250 million gold streaming agreement, and a $75 million senior secured term loan. The equity portion was priced at $3.20 per share, representing a 23% premium to the pre-deal price of $2.60 per share in 2022.
The $12 per share threshold that triggered the warrant acceleration represents a 275% premium over Franco-Nevada’s initial investment price and a 362% premium over the initial closing price.
Following the exercise of these warrants, G Mining Ventures will have eliminated all outstanding warrant instruments.