Amarc Resources Ltd. [TSXV-AHR, OTCQB-AXREF] said it has entered into two concurrent agreements aimed at raising $2.77 million in new common share equity with proceeds earmarked for exploration at copper-gold projects in British Columbia. Under one of the agreements, Amarc will issue 15.4 million flow-through shares at 13 cents each, generating $2 million. The flow-through shares will be issued to a group of investors who are expected to donate all or a portion of their shares to a registered charity in Canada, and to sell the remainder of their shares to an end-buyer along with the charity.
Under the second agreement, Amarc will place 9.6 million non-flow-through units priced at $0.08 each to The Sutton Group Inc. (which currently owns 8.3% of Amarc), generating proceeds of $769,231. Each unit consists of one common share and one half of a share purchase warrant exercisable for five years at $0.08 per share.
The warrants are subject to a blocker term that prohibits exercise of the warrants to the extent the holder, would as a result of any exercise exceed 19.99% of the then issued shares. Sutton has also agreed to purchase, as end-buyer, the 15.4 million flow-through shares.
On Friday, Amarc shares were unchanged at $0.08 and currently trade in a 52-week range of 17 cents and $0.075.
Amarc’s assets include a 100% interest in the 495 square-kilometre Joy copper-gold project in the Toodoggone region of north-central B.C., where Freeport McMoran Mineral Properties Canada Inc. can earn a 70% project interest by making up to $110 million in staged payments.
Amarc recently said it had completed extensive airborne and surface exploration surveys on its 100%-owned DUKE porphyry copper-gold District in central British Columbia. The DUKE District covers 678 square kilometres and is located 80 kilometres northeast of Smithers within the Babine region, one of B.C.’s most prolific porphyry-copper belts.
The company said the surveys were designed to assess 16 porphyry copper-gold targets across the District to confirm highest priority targets for drill testing in 2024. Through 2023, the company said $10 million in exploration expenditures at the DUKE District were being fully funded under an earn-in agreement with Boliden Canada Ltd. Under the agreement, Boliden can earn a 70% interest in the project by making staged exploration and development investments.
To earn an initial 60% interest, Boliden must spend $30 million within four years of the effective date of the agreement, which was announced in November, 2022. Of that amount, $5 million was required to be spend in 2022 and early 2023.
Once it has earned 60%, Boliden can increase its stake to 70% by spending an additional $60 million on exploration and development at a rate of $10 million annually.
Amarc is the property operator until Boliden earns 60%, at which point it becomes the operator. The survey results will be released as soon as they are completed and interpreted, the company said.