Kainantu Resources Ltd (TSX-V:KRL) (KRL) has announced a non-brokered private placement to raise up to C$1.5 million.
The company said the offering will be for up to 8,333,333 units of the company at a price of C$0.18 per unit. Each unit will be comprised of one common share of the company and one common share purchase warrant, with each warrant being exercisable for one common share at an exercise price of C$0.36 each at any time up to 36 months following the closing date of the offering.
In a statement, Matthew Salthouse, Kainantu Resources CEO commented: "After a successful first year of listing, KRL is venturing into 2022 with several significant catalysts to pursue at KRL North, KRL South and the May River Project. Additional strategic discussions on new projects will also continue, which will drive growth and KRL as a value proposition for investors, as a new dynamic junior miner in the Asia-Pacific region."
READ: Kainantu Resources poised for airborne survey at its KRL South project as exploration ramps up
He added: "The Company also remains focused on its projects in Kainantu and the ongoing trends emerging for high-grade gold prospectivity, especially at the East Avaninofi Prospect and at KRL North; with funds raised in the placement to be directly applied to these programmes to accelerate progress towards clearly defined drilling targets near term."
Kainantu Resources said net proceeds from the offering are intended to be used, but are not limited to, exploration programmes at KRL North and KRL South leading to delineation of drilling targets, sampling and technical reports for the May River Project, and general working capital purposes.
The offering is expected to close on or before December 31, 2021. Completion of the offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including acceptance of the TSX Venture Exchange (TSXV).
The warrants will also be subject to an acceleration clause whereby, in the event the volume-weighted average trading price of the common shares on the TSXV is equal to or greater than C$0.72 for a period of ten consecutive trading days, the company will have the right to accelerate the expiry date of the warrants by giving written notice to the holders that the warrants will expire on the date that is not less than 10 days from the date notice is provided by the company.
In connection with the offering, Kainantu Resources may pay finder's fees to certain finders, which fees would be a cash payment equal to 6% of the gross proceeds raised by purchasers introduced by such finders, and the issuance of non-transferable compensation warrants equal to 6% of the number of units purchased by purchasers introduced by such finders.
Each such compensation warrants will be exercisable for one common share at an exercise price of C$0.36 each at any time prior up to 36 months following the closing date of the offering and will be issued on substantially the same terms and conditions as the warrants, except that the compensation warrants will not be subject to an acceleration clause.
All securities issued pursuant to the offering and as payment of any finder's fees, including common shares issuable upon the exercise of warrants or compensation warrants, if any, will be subject to a hold period of four months and one day after the date of closing of the offering.
The units being offered will not be, and have not been, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, a US person.
Kainantu Resources is an Asia-Pacific-focused gold mining company with two highly prospective gold projects, KRL South and KRL North, in a premier mining region, the high-grade Kainantu Gold District of PNG.
Both of the company's projects show potential to host high-grade epithermal and porphyry mineralization, as seen elsewhere in the district. Kainantu Resources has a highly experienced board and management team with a proven track record of working together in the region; and an established in-country partner.
Contact the author at jon.hopkins@proactiveinvestors.com