Los Andes Copper Ltd (TSX-V:LA) said its previously announced US$4 million convertible debenture investment from resource-focused Queen's Road Capital has closed.
The proceeds from the investment will be used to complete the pre-feasibiltity study for the company's Vizcachitas project in Chile and other corporate expenses.
The convertible debenture has a five-year term, carries an 8% coupon and is convertible into Los Andes common shares at C$19.67. The interest is payable quarterly, 5% in cash and 3% in shares, at the 20-day volume-weighted average price prior to the interest payment date.
"We are pleased to close this financing promptly and to move forward with our pre-feasibility study," said R. Michael Jones, CEO of Los Andes in a statement.
READ: Los Andes Copper unveils 2022 planned milestones; announces US$4M investment by Queen's Road Capital
"We are also looking forward to our assay results from completed drilling. Our objective is to announce our drilling results, update the resource model and complete our pre-feasibility study this year. We appreciate the steady support and confidence of Queen's Road Capital," he added.
The convertible debentures is subject to a four-month hold period under Canadian securities laws expiring on August 5, 2022.
Los Andes Copper's Vizcachitas property was the subject of a preliminary economic assessment (PEA), delivered in June 2019, which showed a post-tax net present value (NPV) of US$1.8 billion and an internal rate of return (IRR) of 20.77%, based on a US$3 per pound copper price. The project has a measured resource of 254.4 million tonnes at a grade of 0.439% copper and an indicated resource of about 1.03 billion tonnes at a grade of 0.385% copper.
Vizcachitas lies 120 kilometres (km) north of Santiago, in an area of very good infrastructure.
Contact the author at giles@proactiveinvestors.com