Aldebaran Resources up 50% on financing news

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Aldebaran Resources Inc. [ALDE-TSXV; ADBRF-OTC] shares rallied sharply Friday August 28 after the company upsized a previously announced non-brokered private placement of units that was expected to raise $3 million. The company is now raising $4.8 million by issuing 16 million units at 30 cents per unit.

Aldebaran shares jumped on the news, rising 50% or 20 cents to 60 cents on volume of 1.05 million. Shares were previously trading in a 52-week range of 47 cents and 16 cents.

Aldebaran Resources is a recently formed exploration company led by former management of Antares Minerals and current management of Regulus Resources Inc. [REG-TSXV]. Aldebaran was spun out of Regulus in 2018. The management team has a proven track record with Antares, drilling out the giant Haquira-copper-molybdenum-gold deposit in Peru, which they sold to First Quantum Minerals Ltd. [FM-TSX] in 2010 for approximately $650 million.

Aldebaran acquired the Rio Grande copper-gold project in Salta Province, Argentina from Regulus, along with several other early stage projects in Argentina. Aldebaran is in a joint venture/option with Sibanye-Stillwater [SBSW-NYSE, SSW-JSE] whereby it can earn up to an 80% interest in the Altar copper-gold project in San Juan Province, Argentina. Aldebaran previously said its major shareholder, Route One Investment Co. LP, has invested $30 million to meet Aldebaran’s financing obligations.

The company said each unit of the offering will consist of one common share and one half a warrant with each warrant good to buy one additional share at 70 cents until the second anniversary of closing.

Proceeds will be used for re-logging existing drill core, preparing a new resource estimate for the Altar Project, planning exploration for the next field season expected to begin in November, and general corporate purposes. The offering is expected to close September 14, 2020.

The Altar Project hosts a large copper-gold discovery which Aldebaran identified as an opportunity to re-explore and later deliver to a rising copper market. It said the majority of the 2020 field program was completed before the field camp was closed due government COVID-19 measures. A 115,000-metre re-logging program is in progress.

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