Minto Explorations Ltd will reverse into a Canadian shell company named 1246778 BC LTD, known as 778, and list the shares on the TSX under the new name of Minto Metals Corp, which will own 100% of the Minto mine.
In conjunction, Minto will aim to raise C$40-45mln at a price of C$2.60 to C$2.80, implying a pre-money market capitalization for Minto Metals of up to C$170mln.
Brokers Stifel and Raymond James have been given an option to increase the fundraise by another C$6.75mln.
The offering is expected to close next month and the reverse takeover is expected to be completed in the third quarter.
Pembridge intends to participate in the placement with the aim of holding roughly an 11% stake in Minto Metals, in line with its current economic interest.
It is also proposed that Gati Al-Jebouri, chief executive officer and chairman Pembridge, will have a seat on the board of Minto after the listing.
“This go-public RTO represents the next chapter in the Minto story and an opportunity for new investors to get involved in a growing business,” Al-Jebouri said.
With a recently published NI 43-101 preliminary economic assessment technical report confirming an eight-year life of mine for Minto, with potential for further extension, he said current copper prices support the expected market capitalization of Minto Metals of more than C$200mln after the capital raise.
“Good progress has already been made at Minto and the RTO and associated Minto capital raise will help achieve the further expansion of the mine life, thus revealing the full value of the mine.
“I strongly believe having 100% of the Minto mine listed on a public exchange should help remove the current disconnect between the Pembridge share price and the materially higher underlying value of Minto.”