Kenorland Minerals Ltd (TSX-V:KLD) said it has closed a $5.2 million strategic investment by Sumitomo Metal Mining Canada Ltd, which will be used to fund exploration and for general and administrative expenses.
Sumitomo subscribed for and purchased 5,211,945 common shares at $1 per share for aggregate gross proceeds of $5,211,945, giving it approximately 10.1% of Kenorland’s outstanding common shares.
“We are delighted to welcome Sumitomo Metal Mining as a strategic investor in Kenorland,” president and CEO Zach Flood said in a statement.
“Sumitomo’s investment is a significant milestone for us and represents a strong endorsement of our team, the Frotet project, and our additional projects and partnerships within the exploration portfolio. We look forward to continued success and building an even stronger relationship with our newest significant shareholder.”
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Under an investor rights agreement, Sumitomo is allowed to appoint one director to Kenorland’s board of directors. It said it will also have the right to participate in future equity issuances to maintain its ownership in Kenorland and will be provided with "piggy-back registration rights.”
Additionally, Sumitomo has agreed, for a period of two years, not to:
- Commence a take-over bid;
- Acquire Kenorland’s shares, or direct or indirect rights to acquire any of its shares;
- Make, or in any way participate in any solicitation of proxies to vote the company’s shares;
- Make any public announcement with respect to, or submit a proposal for, or offer of any business combination, amalgamation or merger or similar transaction involving Kenorland.
The company said Sumitomo has chosen its president, Eiichi Fukuda, as its nominee to the Kenorland board, effective November 16, 2021. Fukuda, who has a geology degree from Tohoku University in Japan, is also a board member of Teck Resources Ltd (TSX:TCK.B).
Kenorland is focused on early- to advanced-stage exploration in North America. The group currently holds three projects in Quebec where work is being completed under joint venture and earn-in agreements.
Contact the author at stephen.gunnion@proactiveinvestors.com