Silver Mountain raising $21.7 million from upsized bought deal
Silver Mountain Resources Inc. [AMGR-TSXV] said Friday it has increased the size of a previously announced bought deal financing to $21.7 million and will use the proceeds to fund development of its flagship Reliquias silver mine in central Peru and related concentrator plant. That’s up from the earlier $15 million target.
The company said an underwriting syndicate has agreed to purchase, on a bought deal basis, 16.72 million units of the company for $1.30 per unit. Each unit consists of one common share and one half of a common share purchase warrant. Each warrant will entitle the holder to purchase one common share at an exercise price of $1.70 for 24 months following completion of the offering.
The company has granted the underwriters an option to purchase up to an additional 2.5 million units for 30 days from and including the closing date to cover over-allotments. If the over-allotment option is fully exercised, gross proceeds from the offering will increase to $25 million.
On Friday, Silver Mountain shares advanced on the news, rising 5.9% or $0.08 to $1.44. The shares currently trade in a 52-week range of $1.85 and 50 cents.
News of the financing follows reports that Silver Mountain has signed a 20-year surface land use agreement with the Community of Salcca Santa Ana in central Peru, marking the final approval required to restart operations at the the Reliquias silver mine.
The land use agreement grants Silver Mountain long-term access to key surface areas critical for infrastructure, mining operations, and environmental management. It complements the 20-year agreement previously secured with the Community of Castrovirreyna, meaning that all community-related and regular approvals are now in place to recommence production activities at the mine.
With the final agreement secured, Silver Mountain said it will commence preparations to begin development and operations at the Reliquias Mine. The company said it will provide updates in due course, outlining the project development schedule and key milestones.
Silver Moutain recently said it is in the final stages of negotiating a US$10 million pre-payment facility with Trafigura PTE Ltd., a leading commodities group. The company through its Peruvian subsidiary, and Trafigura have agreed upon indicative terms and are in the process of preparing definitive documents for the facility.
“This facility will represent a significant step forward for Silver Mountain and a strong vote of confidence from Trafigura,” said Silver Mountain CEO Alvaro Espinoza. Highlights from the facility are expected to include multiple drawdowns over a nine-month period following execution, subject to an approved development plan and satisfaction of certain conditions.
In parallel to restarting production at Reliquias, Silver Mountain is exploring for new mineral deposits in its large land package, which covers more than 60,000 hectares and contains a tailings storage facility.