Murchison Minerals Ltd (TSX-V:MUR, OTCQB:MURMF, TSX-V:MUR.V) announced that it intends to raise up to $5.5 million in a non-brokered private placement.
The company said it will use the proceeds from the placement for drilling at its 100%-owned HPM nickel-copper-cobalt property in Eastern Quebec, working capital and administrative expenses.
Strategic investor Michael Gentile and Murchison's largest shareholder Donald K Johnson are expected to participate in the offering, maintaining their current ownership positions, the exploration company said.
READ: Murchison Minerals gets remaining assays from PYC target and starts airborne electromagnetic survey of HPM project in Quebec
"Murchison is very pleased to have the continued support of strategic investor, Mr Michael Gentile, and Murchison's largest shareholder and director Mr Donald K Johnson,” Troy Boisjoli, Murchison Minerals president, CEO, and director said in a statement.
“This is truly an exciting time for the company as we are preparing to move forward with our summer drill program at our HPM nickel-copper-cobalt project in Quebec - where our focus will be on developing the Barre de Fer Zone towards a maiden resource," he added.
Under the offering, Murchison will issue Hard Dollar units (HD units) at a price of $0.09 per HD unit, Quebec flow-through units (QFT units) at a price of $0.105 per QFT unit and Quebec Charity flow-through units (QCFT units) at a price of $0.14 per QCFT unit, in any combination to raise aggregate gross proceeds of up to $5.5 million.
Each HD unit will be comprised of one common share of the company and one-half of a common share purchase warrant, while each QFT unit and QCFT unit will be comprised of one flow-through common share of the company and one-half of a warrant.
Each whole warrant shall be exercisable to acquire one additional common share at a price of $0.18 for a period of 18 months from the date of closing of the offering.
The company said a finder's fee may apply to a portion of the proceeds raised under the offering in the amount of 6% cash and 6% finders' warrants. All securities issued under the offering will be subject to a four-month hold period from the date of issue.
In the event that the volume-weighted average price (VWAP) of the common shares on the TSX Venture Exchange is greater than C$0.225 for 20 consecutive trading days, the company may give notice to the warrant holders that the expiry time of the warrants has been accelerated and the warrants will expire on the 30th business day following the date of such notice.
It is anticipated that Donald K Johnson will acquire a certain number of units under the offering to maintain his current ownership at around 30%.
Murchison also said that, based on the preliminary modelling at the BDF Zone, it is now in a position to move forward with resource expansion and delineation during this summer's drill program. It will be leveraging the past work completed at the BDF Zone - which until now, had not previously been modelled - during the drill program to significantly advance the project forward.
Consequently, it will be releasing an HPM exploration update in the near-term, outlining the use of proceeds from the private placement, with the objective of drilling the high-grade nickel-copper-cobalt BDF Zone, which has the potential to define a near-surface mineral resource.
Murchison Minerals is a Canadian‐based exploration company focused on nickel-copper-cobalt exploration at the 100% owned HPM project in Quebec and the exploration and development of the 100% owned Brabant Lake zinc‐copper‐silver project in north‐central Saskatchewan.
The company also holds an option to earn 100% interest in the Barraute VMS exploration project also located in Quebec, north of Val d'Or.
Contact the author at jon.hopkins@proactiveinvestors.com