Gunnison Copper Corp (TSX:GCU, OTCQB:GCUMF, FRA:3XS0) has settled its outstanding convertible debentures in cash rather than allowing conversion into common shares, eliminating a major source of shareholder dilution.
The move prevents the issuance of about 28.9 million common shares to Greenstone Excelsior Holdings LP and Greenstone Resources LP, strengthening the company's capital structure, Gunnison said.
The debentures carried an effective conversion price of about US$0.135 per share, a 54.4% discount to the roughly US$0.2958 per share price of the company's recently completed equity financing.
The transaction reduces dilution to shareholders by approximately US$4.66 million relative to the recent financing price, equivalent to about US$0.01 per outstanding common share, the company said.
"This transaction reflects our disciplined approach to capital allocation and our commitment to creating shareholder value," said Craig Hallworth, CEO of Gunnison Copper.
"By settling the convertible debt in cash, we prevented the issuance of approximately 28.9 million common shares, eliminating a significant source of potential dilution while removing a meaningful market overhang. Together with our recently completed financing, this transaction strengthens our balance sheet and positions us to accelerate advancement of the Gunnison Copper Project."
Gunnison Copper is a multi-asset pure-play copper developer and producer that controls Arizona's Cochise Mining District, including the flagship Gunnison Copper Project, which hosts a main pit Measured and Indicated Mineral Resource of over 846 million tons at 0.33% copper, containing 5.19 billion pounds of copper.