Honey Badger Silver Inc. [TUF-TSXV; HBEIF-OTC] shares soared Friday February 19 in heavy trading after the company announced a $3 million non-brokered private placement with significant participation from financier Eric Sprott.
The news sent Honey Badger shares up 93% or $0.065 to 13.5 cents on volume of 7.3 million. The shares had previously traded in a 52-week range $0.095 and $0.01.
The private placement will consist of up to 42.86 million units at $0.07 per unit. Each unit will consist of one common share and one-half of a common share purchase warrant. Each whole warrant is good to buy one additional share for 10 cents for three years after closing.
The company said Sprott confirmed his intention to subscribe for 14.29 million units in the offering ($1 million), raising his ownership stake to 12%. Honey Badger Chairman Chad Williams is intending subscribe for 21.43 million units ($1.5 million), increasing his interest in the company to 25%.
Honey Badger has properties in Quebec and Ontario, including an interest in the Thunder Bay Cobalt-Silver District, northwestern Ontario.
Proceeds of the private placement financing, which was announced at the close of trading on February 18, 2021, are earmarked for the company’s Thunder Bay silver portfolio.
The Thunder Bay Silver Project is comprised of the Beaver Silver, Silver Mountain and Mink Mountain Silver properties located between 25 km and 70 km southwest of Thunder Bay, Ontario.
The respective name of each property refers to the name of the main historical silver mine within or near the property boundaries. Over 5 million ounces of silver were produced in the region, mostly before 1900.
Honey Badger is the early mover in consolidating key ground in this historic silver camp that has strong potential for polymetallic mineralization, the company has said.
On February 11, the company said it had signed a binding letter of intent with Strategic Metals Ltd. [SMD-TSXV] to acquire a 100% interest in three silver-focused properties in the Canadian Yukon. “Each of these three properties (Plata, Groundhog, and Hy) offers as much or greater exploration upside than our current Thunder Bay portfolio which is itself very prospective for higher-grade silver,” he company said.
In return for a 100% interest in the properties, Strategic Metals is receiving 19.9% of the outstanding common shares of Honey Badger.