Magna Mining Inc (TSX-V:NICU) has revealed the company is edging nearer to closing the previously announced 'transformational' C$16 million acquisition of Lonmin Canada Inc, which includes the Denison project and covers the past-producing Crean Hill nickel-copper-platinum group elements (PGE) asset.
The company said it expects to satisfy the final conditions of the deal on or around November 4 this year, which means the escrow conditions of a placing of C$0.27 subscription receipts for gross proceeds of around C$20 million will be met.
These escrowed funds will then be released to the company and used, in part, to fund the initial closing payment of C$13 million for the acquisition.
The balance of the escrowed funds will be used for ongoing exploration and development at the Denison project, Magna told investors, while a deferred payment of C$3 million will also be payable on or before the 12-month anniversary of closing the acquisition.
READ: Magna Mining unveils 'transformational' acquisition of Loncan, which includes Denison project
Under the offering, around 74.1 million subscription receipts of Magna Mining were issued on a non-brokered basis at C$0.27 each, raising C$20 million gross.
Upon satisfying the escrow release conditions, the firm will be able to proceed with the conversion of each subscription receipt into company common shares and one-half of one warrant.
As previously disclosed by the company, certain insiders took part in the offering.
As reported in August this year, the Denison property sits just 37 kilometres (km) east of Magna's advanced Shakespeare project. The Crean Hill Mine operated during three separate periods, from 1906 to 2002, with past production totaling 20.3 million tonnes (Mt) grading 1.3% nickel, 1.1% copper, 1.6 grams per ton (g/t) platinum, palladium and gold. Before 2018, several zones of low-sulphide, high PGE footwall mineralization were discovered and defined by Loncan.
Denison has the potential to provide feed to extend the life of mine at the Shakespeare mine or operate in the near term through toll milling or a combination of both, Magna had said.
Magna Mining is focused on nickel, copper and PGM projects in the Sudbury Region of Ontario, Canada. The company's flagship asset is the past-producing Shakespeare mine, which has major permits for the construction of a 4,500-tonne per day open pit mine, processing plant and tailings storage facility and is surrounded by a contiguous 180 sq km prospective land package.
Contact the writer at giles@proactiveinvestors.com