Lucky Minerals (TSX-V:LKY, OTC:LKMNF) Inc has announced a non-brokered private placement of up to 33,000,000 units for gross proceeds of up to approximately C$1.848 million which will see a new strategic investor take a big stake in the firm.
The company said investors in the offering include Michael Gentile, who as a result intends to increase his share ownership in the company potentially up to approximately 19.9% on a partially diluted basis.
The net proceeds of the private placement will be used to support the first drill program on the company’s Fortuna Project in Ecuador and for general working capital purposes.
READ: Lucky Minerals says trenching at its Ecuador gold discovery has identified additional mineralization ahead of its upcoming drill program
The offering consists of approximately 33,000,000 units of the company at C$0.056 per unit. Each unit is comprised of one common share and one full three-year common share purchase warrant. Each warrant entitles the holder to acquire an additional share at a price of C$0.10 per share, until the date that is 36 months from the closing of the offering.
All the shares and warrants issued in connection to the offering are subject to a statutory hold period expiring four months and one day from the date of issuance.
The company may pay finders’ fees on a portion of the offering in accordance with applicable securities laws and the policies of the TSX Venture Exchange. The offering is subject to TSX Venture Exchange approval
New strategic investor
The company noted that Gentile is considered one of the leading strategic investors in the junior mining sector, owning significant positions in over 15 small-cap mining companies.
He is currently a strategic advisor to Arizona Metals and Geomega Resources as well as being a director of Northern Superior Resources, Roscan Gold, Radisson Mining Resources, and Solstice Gold.
Gentile recently co-founded Bastion Asset Management, an investment management firm based out of Montreal, Quebec and was previously a Senior Portfolio Manager with Formula Growth Limited.
In a statement, Gentile commented: “Lucky Minerals is on the cusp of the most exciting and value-creating face for a junior exploration company, the discovery phase. With the maiden drill program about to begin on their Wayka property, the potential for a major new discovery is high as the Company begins drilling directly under some of the wide and high-grade trenches uncovered in 2021 and 2022."
He added: "As set out in previous news releases, drilling under trench T-14 which uncovered 8 g/t gold over 9 m and trench T-21 which uncovered 5.24 g/t gold over 14 m, greatly increases the odds of success and positions Lucky Minerals well for the 2022 drill program. This new mineralized system is showing a large footprint that continues to expand with additional surface work and trenching. With a large and growing footprint, drilling about to begin and a small market cap of less than 10 million Canadian, the risk reward proposition in Lucky Minerals is quite compelling.”
Francois Perron, Lucky’s president and CEO said: “We are very excited to have Mr. Gentile join potentially as a significant shareholder of Lucky Minerals. Our project in Ecuador is entering a very exciting phase. Getting the support from a strategic long-term investor at this juncture helps lay the foundation upon which we will continue to build the Company. The entire team is looking forward to first drilling the discovery zone at Wayka in the coming weeks.”
Shares for services agreement
Lucky Minerals also announced that subject to regulatory approval, it has entered into a shares for services agreement with Franklin Viera who will provide services to the company as a technical consultant for the drilling phase of its Ecuador property. Services provided will include 3D modeling, GIS, drill hole planning, geochemical analysis, core logging, field geological mapping property evaluation, database management and occasional field program supervision and other duties that may be required by the company.
While the agreement is in effect, Viera will receive a portion of his compensation in common shares of the company equivalent in value of up to US$5,000 per month.
The company noted that Viera is a well-known geologist in Ecuador and has been involved in many significant projects including the discovery of Quimsacocha which is now called the Loma Larga project.
Lucky is an exploration and development company targeting large-scale mineral systems in proven districts with the potential to host world-class deposits.
The company owns a 100% interest in the Fortuna Property which is comprised of twelve contiguous, 550 square kilometers (55,000 hectares, or 136,000 acres) exploration concessions located in a highly prospective, yet underexplored, gold belt in southern Ecuador.
Contact the author at jon.hopkins@proactiveinvestors.com