Lion One details $15 million strategic investment by Arete Capital
Lion One Metals. [LIO-TSXV, LOMLF-OTCQX, LLO-ASX] has announced details of a $15 million strategic investment by Arete Capital Advisory Pty Ltd., a specialist mining investment syndicate advised and managed by Arete Capital Advisors.
Lion One said Arete Capital has agreed to acquire, on a non-brokered private placement basis, 44.26 million units priced at 34 cents per unit, with each unit consisting of one common share and one common share purchase warrant. Each warrant will entitle the holder to acquire one common share for 39 cents for three years after the offering closes. The common shares being purchased will represent 9.9% of the company’s outstanding shares on a pro-form basis, not giving effect to the exercise of warrants.
Lion One’s key asset is the Tuvatu gold mine project, which covers approximately 200 square kilometres and is located in the upper Sabeto Valley on the main island of Viti Levu in Fiji. The project is being advanced as a low-cost underground operation with potential for growth.
The Tuvatu property is a high-grade, narrow vein, alkaline-hosted gold deposit located on five tenements held by Lion One. The project area is on a small part of the Navilawa Caldera, a 7.0-kilometre diameter geological occurrence hosting a mineral system associated with widespread alkaline magmatism. Tuvatu sits on one of the only large alkaline gold systems not owned by a major mining company.
“In our view, Tuvatu is a rare, high-grade alkaline gold system with district scale potential, established infrastructure, and a pipeline of targets across the broader Navilawa Caldera that together offer a compelling platform for production growth and resource expansion,’’ said Arete Capital Corp. CEO Campbell Olsen
Under an investor rights agreement, Arete will be entitled to nominate one director to the Lion One board as long as it maintains an equity interest of 9.9%. It will also be entitled to participation rights in future equity financings to maintain its equity interest.
As well, under the terms of a master services agreement (MSA), Arete will provide management services for the operation of the Tuvatu mine and will become the operator of the project subject to the oversight of the board of directors of the company. The MSA will have an initial term of five years, subject to extension as agreed to by the parties. Arete will be entitled to base compensation and performance incentives and will be eligible to receive share-based compensation.
On Tuesday, Lion One shares eased 1.5% or $0.005 to 33 cents. The shares currently trade in a 52-week range of $0.44 and 22.5 cents.