Los Andes Copper Ltd (TSX-V:LA) announced that Queen's Road Capital Investment Ltd has agreed to invest a further US$5 million in Los Andes by way of an additional convertible debenture.
The resource project developer said proceeds from the capital raise will be directed towards expansion drilling at the Vizcachitas copper project in Chile, which is expected to begin soon, completion of the Vizcachitas project prefeasibility study that is underway, and for general corporate purposes.
“This financing allows us to continue to progress the project and target resource growth while minimizing dilution to shareholders,” Los Andes Copper CEO R Michael Jones said in a statement.
READ: Los Andes Copper says drilling can resume at Vizcachitas Copper Project after Chilean court decision
“These funds will allow us to continue with the exciting expansion drilling of Vizcachitas with up to five rigs and complete our prefeasibility study, which is anticipated in 4Q this year,” Jones added.
Los Andes noted the convertible debenture will have a five-year term, carry an 8% coupon, and will be convertible into company common shares at a price of C$16.75 per share.
It added that the interest is payable quarterly, 5% in cash and 3% in shares (at the election of Los Andes), at the 20-day volume weighted average price before the interest payment date.
As well, the company said it will set aside US$1.05 million in a separate account to provide for the cash component of the interest on all three tranches of the debentures for the next 18 months.
The financing is expected to close on September 2, 2022, and will result in Queen's Road Capital owning a total of US$14 million of convertible debentures in Los Andes Copper, representing 1,250,462 company shares if converted.
Based in Vancouver, Los Andes Copper is focused on developing its Vizcachitas copper-molybdenum porphyry project in Chile.
Contact Sean at sean@proactiveinvestors.com