Ascendant Resources Inc. (TSX:ASND) said it has completed a C$3.9 million non-brokered private placement of secured non-convertible debenture units.
The company noted that it intends to use the proceeds to continue with detailed metallurgical test work and complete a new 43-101 Preliminary Economic Assessment (PEA) on both the North and South zones at the Lagoa Salgada project in Portugal as well as for working capital and general corporate purposes.
Ascendant said the metallurgical test work is expected to be completed to a Pre-Feasibility Report level of study given the nature of the ores typically seen in the region and the results, along with a newly updated Mineral Resource Estimate, will then be used to undertake the new PEA.
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The new PEA is planned to incorporate the mineral resources from both the North and South zones into one, larger-scale operation, with a longer mine life and increased throughput rates relative to the previous PEA completed which focused solely on the North Zone as a stand-alone project.
Delivery of the new PEA is scheduled to be completed by mid-August and the new results are expected to show a material increase in the economic potential offered at Lagoa Salgada.
In a statement, Mark Brennan, Ascendant's executive chairman, commented, "We are pleased to have secured this funding on attractive terms. The proceeds will allow the Company to continue advancing metallurgical test work and fund the completion of a new Preliminary Economic Assessment of a larger, combined project incorporating both the North and South Zones, which we expect to demonstrate the robust potential at Lagoa Salgada. We strongly believe Lagoa Salgada has the potential to become one of the premier mines in the Iberian Pyrite Belt, given the numerous similar characteristics it holds to other projects located in the region".
Under the private placement, the company issued 3,900 debenture units at a price of $1,000 per unit for an aggregate principal of C$3,900,000. Each unit consists of $1,000 principal amount of 10% secured debentures and 3,333 common share purchase warrants. Each debenture warrant entitles the holder to acquire one common share of the company at an exercise price of C$0.30 for a period of 60 months from the date of issuance. The debentures bear interest at a rate of 10.0% per annum and will mature 18 months from the date of issuance.
Debentures secured by a pledge
The debentures are secured by a pledge of 3,000,000 common shares in the capital of Cerrado Gold Inc. by four individuals - Mark Brennan, Stephen Shefsky, Solomon Pillersdorf, and Cliff Hale Sanders - under a limited-recourse guarantee and share pledge agreement between each pledgor and the debenture holder.
The company has agreed to guarantee and indemnify the pledgors in the event that the holder of the debentures enforces its security pursuant to the Pledgor Guarantee Agreements pursuant to a limited-recourse guarantee and indemnity agreement entered into between the company and the pledgors.
In addition, the company entered into a pledge quota agreement with the pledgors under which it granted a security interest in its equity ownership of Redcorp Empreendimentos Mineiros LDA, a Portuguese private limited liability company. The company also issued 3,000,000 common share purchase warrants to the pledgors. Each pledgor warrant entitles the holder to acquire one common share at an exercise price of C$0.17 per common share for a period of 36 months from the date of issuance.
The company said it paid an arm's length finder a cash fee of C$273,000 and issued the finder 1,365,000 common share purchase warrants. Each finder warrant entitles the holder to acquire one common share at an exercise price of C$0.17.
Securities issued in connection with the private placement to persons subject to Canadian securities laws are subject to a hold period of four months and one day in accordance with applicable securities legislation.
Investor call details
Ascendant also revealed details of an investor update call to be held on May 13, 2021 at 12.00pm Eastern Time - Zoom Meeting link: https://zoom.us/j/96168110188?pwd=dS9HY3l3VVY1Sm96UFhFaUVYUnZ4dz09; Meeting ID: 961 6811 0188; Passcode: 158299; One tap mobile +13126266799,,96168110188#,,,,*158299# US (Chicago), +13462487799,,96168110188#,,,,*158299# US (Houston); Dial by location: +1 312 626 6799 US (Chicago), +1 346 248 7799 US (Houston), +1 669 900 6833 US (San Jose), +1 929 205 6099 US (New York), +1 253 215 8782 US (Tacoma), +1 301 715 8592 US (Washington DC, Meeting ID: 961 6811 0188, Passcode: 158299. To find local numbers: https://zoom.us/u/aPXtpUgiE
Ascendant Resources is a Toronto-based mining company focused on the exploration and development of the highly prospective Lagoa Salgada VMS project located on the prolific Iberian Pyrite Belt in Portugal. Through focused exploration and aggressive development plans, the company aims to unlock the inherent potential of the project, maximizing value creation for shareholders.
Lagoa Salgada contains over 14.75 million tonnes of M&I Resources and 11.88 million tonnes in Inferred Resources and demonstrates typical mineralization characteristics of Iberian Pyrite Belt VMS deposits containing zinc, copper, lead, tin, silver and gold. Extensive exploration upside potential lies both near deposit and at prospective step-out targets across the large 10,700ha property concession. T
Ascendant holds a 21.25% interest in the Lagoa Salgada project through its 25% position in Redcorp - Empreendimentos Mineiros, Lda, (Redcorp) and has an earn-in opportunity to increase its interest in the project to 80%. Mineral & Financial Investments Limited owns the additional 75% of Redcorp. The remaining 15% of the project is held by Empresa de Desenvolvimento Mineiro, S.A., a Portuguese government-owned company supporting the strategic development of the country's mining sector.
The company's interest in the Lagoa Salgada project offers a low-cost entry to a potentially significant exploration and development opportunity, already demonstrating its mineable scale.
Contact the author at jon.hopkins@proactiveinvestors.com