Millennial Potash Corp (TSX-V:MLP, OTCQB:MLPNF, FRA:XOD) said on Monday it will raise C$15.25 million through a bought-deal private placement to fund work on its Banio potash project.
The junior resource company will issue five million units at C$3.05 each under the offering, it said. Each unit will comprise one common share and half of one share purchase warrant. Each full warrant will be exercisable at C$4 per share for a period of three years from the closing date.
Cantor Fitzgerald Canada is acting as lead underwriter and sole bookrunner for the offering. The underwriters have agreed to purchase the units, or arrange for substitute purchasers, with a formal underwriting agreement expected to replace the letter agreement ahead of or at closing.
Under the terms of the deal, the underwriters will receive a cash commission equal to 6% of the gross proceeds and broker warrants equal to 4% of the total number of units sold. Each broker warrant will allow the holder to buy one common share at C$3.05 for up to 36 months.
Millennial Potash has also granted the underwriters an option to purchase up to an additional 15% of the units at the same price, exercisable in whole or in part up to 48 hours before the closing date.
The company said proceeds will primarily be used to cover costs related to a definitive feasibility study for the Banio project, with the remainder allocated to working capital and general corporate needs.