Atex shares up 12% on Agnico-Eagle financing news
Agnico-Eagle Mines Ltd. (AEM-TSX, AEM-NYSE) has made a strategic investment in Atex Resources Inc. (ATX-TSXV) by way of a US$40 million non-brokered private placement.
Atex shares rallied on the news, rising 11.7% or 17 cents to $1.62. The shares previously traded in a 52-week range of $1.57 and 61 cents.
Proceeds from the offering will be allocated toward the company’s exploration activities at the Valeriano copper-gold project located in the Atacama region of Chile and for general corporate purposes. In addition to the offering, Atex will repay the entire outstanding balance on its US$15 million credit facility through the issuance of equity.
Under the agreement, Agnico will subscribe for approximately 33.9 million units of Atex at a price of 41.63 per unit, a move that will generate gross proceeds of $55 million or US$40 million.
The issue price per unit represents a 15% premium to the closing price of the common shares on the TSX Venture Exchange as of October 18, 2024.
Each unit will consist of one common share and one-half share purchase warrant, with each warrant entitling the holder to acquire one common share at a price of $2.50 for 60 months from the issue date, subject to acceleration under certain conditions.
In addition to the offering, the company has struck a deal with Firelight Investments, Beedie Capital and Trinity Capital Partners to settle US$15 million owing on its credit facility by issuing to the lenders approximately 7.9 million units (on the same pricing as the offering) and 5.5 million common shares at a price of $1.42.
The company will also make a concurrent private placement to new board member Rick McCreary, under which McCreary will subscribe for units worth $500,000. Upon closing of the offering, the debt repayment and the private placement to McCreary, Agnico will own approximately 13% of Atex’s issued and outstanding shares. The offering is expected to close on October 30, 2024.
In connection with the offering, Agnico and Atex will enter into an investor rights agreement, that grants to Agnico certain rights provided it maintains certain ownership thresholds in Atex. Those include the right to participate in equity financings and top up its holdings in order to maintain its pro rata ownership.
Atex is exploring the Valeriano copper-gold project which is located within the emerging copper gold porphyry mineral belt linking the prolific El Indio High-Sulphidation Belt to the south with the Maricunga Gold Porphyry Belt to the north. Valeriano host a large copper gold porphyry resource: 1.41 billion tonnes at 0.67% copper equivalent (CuEq) (0.50% copper, 0.20 g/t gold, 0.96 g/t silver and 63.80 g/t molybdenum. That includes a higher grade core totaling 200 million tonnes of 0.84% CuEq.