Europa Metals Ltd (AIM:EUZ, JSE:EUZ) has announced a US$6mln farm-in agreement for its flagship Toral project and an equity fundraising at a “substantial” premium, pushing its shares up by around 40% in early trade on Wednesday.
Europa Metals said it has entered into a definitive option agreement with Denarius Metals Corp that gives the Canadian junior the right to acquire up to 80% of the Toral lead-zinc-silver project in Spain in two stages, subject to the approval of Europa Metals’ shareholders.
Europa Metals announced last month that it had signed a letter of intent with Denarius.
READ: Europa Metals rockets higher on earn-in deal at Toral
Initially, Denarius can take a 51% stake by spending US$4mln over three years including the completion of a preliminary economic assessment (PEA) and the completion and submission of a mining licence application for Toral to the local administration by the end of July 2023, under the terms announced today.
Under Stage 2, Denarius can take a further 29% interest by completing an NI 43-101 compliant pre-feasibility study (PFS) for Toral and making a cash payment of US$2mln to Europa Metals.
"I am delighted to have agreed definitive documentation with our incoming joint venture partner, Denarius,” said Myles Campion, executive chairman and acting chief executive of Europa Metals in a statement.
Europa Metals also announced that it has conditionally raised £580,000 via a subscription for 12.89mln new shares at 4.5p each to an “existing supportive institutional shareholder and certain new investors”.
The price represents a premium of about 60.7% to yesterday’s closing share price. Shares in Europa Metal were up 39% at 3.88p in early trading in London.
“I am also pleased to have completed a capital raising of £580,000 at a substantial premium to the prevailing market share price, which augments our working capital position and clearly demonstrates confidence in the Toral project and our strategic direction in the current uncertain market conditions," added Campion.