Filo Mining Corp. [FIL-TSXV, NASDAQ First North] is moving to raise $40 million to fund exploration and development at its 100%-owned Filo del Sol Project, which straddles the border of Region 111, Chile and San Juan Province, Argentina.
Filo Mining is a member of the Lundin Group of companies. The Filo del Sol Project is a high-sulphidation epithermal copper-gold-silver deposit associated with a large porphyry gold system.
Filo said it has struck a deal with an underwriting syndicate led by BMO Capital Markets, which has agreed to buy 7.27 million Filo shares on a bought deal basis at $2.75 per share. Gross proceeds are expected to be $20 million. A Lundin Family-related trust has agreed to purchase approximately $5 million worth of the shares that are being offered in the financing.
Concurrently, a Lundin Family-related trust has agreed to buy on a private placement basis, approximately $20 million worth of common shares on the same terms. The underwriters have been granted a greenshoe option to purchase an additional 15% of the offering for up to 30 days after the closing date of the offering.
News that Filo is raising $40 million came after the close of trading on North American markets, August 12, 2019. When trading in the shares resumed on Tuesday, the shares eased 11.18% or 34 cents to $2.70. The shares are currently trading in a 52-week range of $2 and $3.25.
Filo recently announced impressive results in the final assays from a 2019 drill program at Filo del Sol.
The seven holes drilled during the past season extend along a north-south distance of 1,800 metres, and all intersected high-grade mineralized zones and ended in mineralization, with the exception of FSDH031, the company said in a press release that was issued after the close of trading on May 28, 2019.
Highlights include drill hole FSDH030, which returned 378 metres of 0.44% copper and 0.89 g/t gold, including 12 metres of 12.60 g/t gold, 0.54% copper and 260 g/t silver.
The Filo del Sol Project is located in the Andes Mountains, 140 km southeast of the Chilean city of Copiapo and was recently the subject of a pre-feasibility study that is based on proven and probable reserves of 259.1 million tonnes, grading 0.39% copper, 0.33 g/t gold, 15.1 g/t silver, or 2.2 billion pounds of copper, 2.7 million ounces of gold and 126 million ounces of silver.
The prefeasibility study envisages annual production of approximately 67,000 tonnes of copper (including copper as a precipitate), 159,000 ounces of gold and 8.6 million ounces of silver at a cost of US$1.23 per pound of copper equivalent.
The pre-production capital cost is estimated at $1.27 billion. Over a 14-year mine life (including pre-stripping) the operation is expected to produce almost 1.75 billion pounds of copper as cathode, and 1.92 million ounces of gold and 104 million ounces of silver as doré bars over a 13-year leach feed schedule.
Additional copper is also expected to be recovered as high-grade copper precipitate.
The prefeasibility study contemplates that Filo del Sol would be mined using conventional open pit methods. It is forecast that ore would be trucked from the open pit to a conventional two-stage crusher, designed to process 60,000 tonnes per day of ore, followed by hydrometallurgical processing to produce copper cathodes and gold-silver dore.
That material would be transported by truck to Puerto Caldera, which is located approximately 245 km by road from the plant site.