Abitibi Metals to Raise $30.8 Million Via Non-Brokered Financing Led by Discovery Silver, With 9.9% Strategic Stake
Abitibi Metals (AMQ.CN) announced a non-brokered private placement for up to $30.8 million, on Thursday.Discovery Silver is expected to buy about 9.9% of its issued and outstanding common shares on a non-diluted basis upon closing of the offering, it said. In connection with closing of the offering, Abitibi Metals and Discovery will enter into a participation agreement, whereby, subject to certain conditions, the company will grant certain financing and other participation rights to enable Discovery to maintain its shareholding interest in the company and other customary investor rights.The offering is expected to consist of a combination of 11.8-million charity flow-through common shares at $0.85 per CFT share, and 35.8-million hard dollar common shares at $0.58 per HD share, for total proceeds of up to $30.8 million.Proceeds from the issuance of the CFT shares are expected to be used to incur eligible "Canadian exploration expenses" that will qualify as "flow-through mining expenditures" on its Quebec-based projects. The net proceeds from the issuance of the HD shares are expected to be used for exploration and development activities, as well as for general corporate needs.Shares of the company closed up 4.2% to $0.74 on Wednesday on the Canadian Securities Exchange.
