Candelaria Mining Corp. (CVE:CAND) said it has entered into an agreement with Echelon Wealth Partners Inc. as sole agent and bookrunner, under which Echelon has agreed to sell, on a “best efforts” private placement basis, up to $25 million worth of units of the company at a price of $0.45 per unit.
Each unit will consist of one common share of the company and one common share purchase warrant, with each warrant entitling the holder to acquire one common share of the company at a price $0.65 for a period of 24 months following the closing of the offering.
The company has also granted Echelon an option to increase the size of the offering by up to 15%, exercisable at the discretion of the Echelon at any time until 48 hours prior to the closing.
READ: Candelaria Mining provides corporate update following recently announced additions to its board and executive team
Candaleria said it is anticipated that the net proceeds from the offering will be used to fund construction at the company’s Pinos Gold Mine, exploration activities at the Caballo Blanco District and the Pinos Gold Project, and general corporate purposes.
The company noted that it has received aggregate commitments of approximately $13 million from certain investors, including Agnico Eagle Mines Limited which has indicated that it intends to subscribe for such number of units that will result in it owning approximately 9.95% of the basic shares outstanding on a partially diluted basis after giving effect to the offering. Agnico Eagle currently owns 10,120,000, or 7.9% of the company’s common shares.
In a statement, Candaleria CEO, Mike Struthers commented: “This is the start of a very exciting year for Candelaria as we evolve from an explorer to a producer in a little over 12 months, and as we execute an exciting exploration program at the company’s flagship asset in the Caballo Blanco district. We’re grateful for the continued support of our key shareholders, including Agnico Eagle, and I look forwards to providing regular updates on our ambitious plans for this year as we move forwards.”
The offering is scheduled to close on or about May 14, 2021, and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals, including the approval of the TSX Venture Exchange.
Contact the author at jon.hopkins@proactiveinvestors.com