Altaley Mining Corporation (TSX-V:ATLY) has said it intends to conduct a non-brokered private placement financing to raise gross proceeds of up to C$5 million.
The company said the net proceeds from the units will be used for working capital expenses related to the beginning of mining and milling operations at the Tahuehueto Mine and for general working capital purposes.
In a statement, Ralph Shearing, Altaley's CEO, commented: "This Private Placement gives the company security to know that we have enough capital to address any unforeseen possible start-up difficulties that may present themselves as the Tahuehueto gold mine ramps up to full capacity over the next three to six months."
READ: Altaley Mining reports updated PFS for Tahuehueto mine ahead of pre-production due to start this month
Under the private placement, Altaley Mining said it intends to sell up to 14,285,714 units from treasury at a price of C$.35 per unit.
Each unit shall consist of one common share of the company and one-half of one transferable share purchase warrant. Each whole warrant shall entitle the holder to acquire one additional common share at a price of C$0.55 per warrant share for a period ending two years following the closing of the private placement subject to an acceleration clause.
If, at any time between the closing date and the expiry date, the closing price of the company's common shares on the TSX Venture Exchange exceeds $0.75 for 15 consecutive trading days, then the company will earn the right, by providing notice to the warrant holder via news release or written notice, to accelerate the expiry date of the warrants to 4.00pm Vancouver time on that date which is 30 days from the date of the Acceleration Notice. In such instance, all warrants that are not exercised prior to the accelerated expiry date will expire then.
All securities issued in connection with the private placement will be subject to a four-month plus one-day hold period under applicable Canadian securities laws. Finder's fees may be paid in connection with certain properly introduced subscribers that participate in the Private Placement. The private placement is subject to the approval of the TSX Venture Exchange.
Investor relations agreement
Altaley Mining also announced that it has retained Arrowhead Business and Investment Decisions LLC to provide investor relations services to the company and develop its international market awareness.
Arrowhead will advise Altaley Mining on its international capital markets strategy and has been engaged to, among other matters, expand the following of the company and the involvement of the investment community in its equity story; advise on messaging and review and revise corporate materials; provide independent perspective and valuation on the company; and assist with long-term investor relationship management.
Arrowhead will work closely with Altaley Mining to develop and deploy a comprehensive international investor marketing program, which will include the publication of independent analysis, investor targeting, corporate disclosure distribution, non-deal roadshows, reporting and strategic advisory.
"We are delighted to engage Arrowhead and think they are the right partner to help expand the reach of our investor relations program as we continue the Company's development into a mid-tier precious and base metal producer in Mexico," said Shearing.
Arrowhead will provide services for an initial renewable six-months term. Cash compensation for the services will be US$50,000 over the period.
Daniel Renaud, managing director at Arrowhead, added: "This is an exciting time for Altaley Mining, considering its Tahuehueto gold mining project is entering its final phases of development and further efficiencies are coming into effect at its Mexican polymetallic producing operation, Campo Morado. Against the backdrop of high inflation, shortages of key metals and robust demand for commodities the Company's diversified resource base offers an attractive investment proposition. We are very excited to partner with Altaley Mining to make the Company better known within the North American and international investment community. We believe many investors will find the information we provide on Altaley Mining valuable and that we can help the Company significantly increase investor engagement through 2022 and beyond."
Altaley Mining Corporation is a Canada-based mining company with two 100% owned Mexican gold, silver, and base metal mining projects.
The company's Tahuehueto mining project is in north-western Durango State, Mexico where construction has been advanced to an estimated 95% of completion on its 1,000 tonne per day processing facility and related mine infrastructure to initiate production of gold, silver, lead, and zinc in concentrates at Tahuehueto. The Company is targeting initial pre-production in March 2022 and ramping up to full production capacity during Q2-Q3 2022.
Campo Morado is an operating polymetallic base metal mine with mining and milling equipment currently producing at an average of 2,200 tonnes per day and is currently estimated to be Mexico's 6th largest zinc producer.
Contact the author at jon.hopkins@proactiveinvestors.com