Orefinders unveils seed funding plan for battery metals spin-off

Exploring an outcrop. Source: Orefinders Resources Inc.

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Exploring an outcrop. Source: Orefinders Resources Inc.

Orefinders Resources Inc. [ORX-TSXV, OTC-ORFD] released an update Monday March 26 on its spin-off company Power Ore Inc., which will acquire Orefinder’s past-producing silver-cobalt Mann Mines and MacMurchy properties via a court approved plan of arrangement.

The properties are located in the Cobalt-Gowganda District of northeast Ontario, and form part of the company’s plan to create a pure play battery metals company.

Additionally, Power Ore on Monday announced the pricing for its seed round of financing, which is available to accredited investors. Total gross proceeds for Power Ore’s seed round will be up to $1 million.

“We see this transaction as a win-win for the Orefinders balance sheet as this is akin to a non-dilutive financing,” said Orefinders CEO Stephen Stewart.

“Additionally, all Orefinders shareholders who will be receiving distributed shares in Power One, and the new shareholders coming into Power One will have direct exposure to a series of acquisitions in Canada’s cobalt and battery metal sector,” he said.

In a press release Monday, the company said there are no founders or free shares being issued in Power One, and management is acting as the lead order in this financing.

Power Ore’s seed round pricing is as follows:

  • Hard dollar units are $0.05 and include a common share plus a one half warrant exercisable at $0.08 for two years from closing.
  • Flow through units are $0.06 and include common shares plus a one half warrant exercisable at 10 cents for two years from closing.

While Orefinders is a gold-focused company, it happens to own one of the most prospective silver and cobalt assets in what is a very hot district due to the demand for battery and energy storage metals.

Companies like Orefinders hope to benefit from predictions that the price of cobalt will continue to rise after a 120% increase in 2017. BMO Capital Markets, for example, has said a doubling of the cobalt spot price over the coming years is not out of the question.

The aim is also to capitalize on the electric vehicle revolution which is expected to boost demand for cobalt, a key ingredient in the production of cathodes used to manufacture lithium-ion batteries.

“The new company will act as an acquisition and development vehicle for Abitibi battery metal projects. Our team is very knowledgeable in the geology of the Gowganda-Cobalt Ontario District and we also have established relationships at the asset ownership level,” Orefinders said.

Orefinders shares rose 4.00% or $0.005 cents to $0.13 on the TSX Venture Exchange Monday where they trade in a 52-week range of 17 cents and $0.045 cents.

The Mann Mines properties host nine historic shafts and a ramp that was driven to the 210-foot level. The former Mann Mine, along with other adjacent prospects, reported produced nearly 500,000 ounces of silver, Orefinders said.

Orefinders said it views the Mann Project as a highly promising advanced development project which is drill ready for future work. The company hopes to realize significant value for its shareholders from the Mann Project and additional assets which the new company would acquire to complement its battery metals portfolio.

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