ASX-listed exploration company AuTECO Minerals has secured firm commitments for an A$55m ($35.53m) share placement to support the acquisition of the Green Bay copper-gold project in Newfoundland, Canada.
AuTECO agreed to pay a total of A$65m for the acquisition in two stages.
Stage one will involve an upfront payment consisting of A$35m in cash and A$15m in shares, to be paid on closing. Within 18 months of closing, a further payment of A$7.5m will be made in cash and A$7.5m in shares.
In the first tranche of the placement, the company will issue 346.95 million of its shares at A$0.025 apiece, to raise around A$8.7m.
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It plans to garner an estimated A$46.3m in the second tranche through the issuance of 1.85 billion shares, each priced at A$0.025.
Upon shareholder clearance of the acquisition, Steve Parsons will assume the role of AuTECO managing director and Michael Naylor will become executive director.
Parsons said: “On behalf of the board, I thank investors for the huge support they have given to the Green Bay purchase and capital raising.
“We look forward to implementing our plan to grow the Green Bay Resource as quickly as possible through an aggressive drilling programme, which is due to start shortly.”
Proceeds from the placement’s first tranche will support the company’s current projects.
Funds from the second tranche will be used to meet the stage one payment of the acquisition, as well as for Green Bay’s exploration activities, project care and maintenance, and general working capital requirements.
AuTECO said that with this placement, many large Australian and overseas institutions will become the shareholders of the company.
It added that this will help the company become fully funded to begin ‘aggressive’ exploration for the growth of the Green Bay project.
The resource growth programme at the project includes plans for 700m of underground exploration development and 40,000m of drilling.
As part of its strategy, the company aims to begin drilling at the Ming mine within the Green Bay project.
Besides, a share purchase plan will open on 6 September and end on 19 October to generate another A$3m.
The Green Bay project has resources of 39.2 million tonnes (t) at 2.1% for 811,000t of copper equivalent, of which 68% is in the measured and indicated category.