Chesapeake raising $15 million from upsized offering for Mexico projects
Chesapeake Gold Corp. [CKG-TSXV, CHPGF-OTCQX] has upsized a previously announced bought deal public offering to $15 million, marking an increase from the earlier $10 million target. Under the terms of the upsized offering, the underwriters have pledged to purchase 3.57 million units priced at $4.20 per unit.
Proceeds are earmarked for the company’s Metates and Lucy precious metals projects in Mexico.
Each unit will consist of one common share and one half of one common share purchase warrant. Each warrant will entitle the holder to purchase one common share at a price of $5.65 at any time on or before that date which is 36 months after the closing date.
The company has granted the underwriters an option to purchase additional units equal to up to 15% of the number of units sold under the underwritten offering at the offering price to cover overallotments, if any. That option can be exercised in whole or in part, at any time for up to 30 days after closing, which is expected to occur on January 27, 2026.
The company also said it plans to complete a non-brokered (NB) private placement of up to 685,000 units priced at $4.20 each for gross proceeds of $2.87 million. Each NB unit consists of one common share and one half of one common share purchase warrant. Each NB warrant will entitle the holder to purchase one common share for $5.65 at any time on or before that date which is 36 months following the closing date. The NB units will be issued on substantially the same terms ast the units and will be subject to a hold period under applicable Canadian securities laws until four months and one day after closing.
Eric Sprott, via an Ontario numbered company owned by him, has indicated its intention to participate in the NB offering in a bid to maintain his pro rata ownership stake in the company following completion of the offerings. Prior to the offering, he held 12.9 million shares and 1.85 million warrants, representing a 17.9% of the outstanding shares on a non-diluted basis (19.9% partially diluted).
Chesapeake’s flagship asset is the Metates Sulphide Heap Leach project in Durango, Mexico. Metates hosts one of the largest gold-silver deposits in the Americas with over 16.77 million ounces of gold at 0.57 g/t, and 423.2 million ounces of silver at 14.3 g/t within 921.2 million tonnes in the measured and indicated category. On top of that is a further 2.13 million ounces of gold at 0.47 g/t and 59.0 million ounces of silver at 13.2 g/t within 139.5 million tonnes in the inferred category.
Chesapeake shares were unchanged Tuesday at $4.53 and trade in a 52-week range of $5.10 and 83 cents.