Candelaria Mining Corp unveiled plans to raise up to C$7.8 million at C$0.45 a unit via a private placing to advance its flagship Caballo Blanco project in Mexico.
Current shareholder and mining major Agnico Eagle along with certain investors have indicated their intent to subscribe for a total of around C$7.7 million, including C$6 million from Agnico Eagle.
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After the offering, Agnico would then own around 19.59% of the firm's basic shares on a partially diluted basis. It currently owns around 7.9% of Candelaria shares .
"We are very pleased to announce this placing which allows us now to push forward with an ambitious exploration program at our flagship asset, the Caballo Blanco district in Veracruz," said Candelaria CEO Mike Struthers in a statement.
"This highly prospective epithermal-porphyry mineralized district has potential to become a significant mining camp and we’re very excited to start generating drill results to demonstrate that potential.
"We’re grateful for the continued support of our key shareholders, including Agnico Eagle, and I look forward to providing regular updates over the coming months."
Under the offering, each unit comprises one company share and one-half of a share purchase warrant, with each full warrant entitling the holder to acquire one company share for C$0.65 for 36 months following closing.
The first C$1 million invested by Agnico Eagle will be used for permitting and related activities at the Caballo Blanco project and, subject to receipt of necessary permits, the balance of C$5 million will be used for exploration and development.
Additional funds raised are expected to be used for general corporate purposes, noted the company.
The offering is scheduled to close on or around September 30 this year.
Contact the author at giles@proactiveinvestors.com