Peruvian miner Cia. de Minas Buenaventura SAA will pay C$16 million to acquire a 19.3% stake in Canadian explorer Tinka Resources Ltd., owner of the Ayawilca zinc project in Peru.
Buenaventura agreed to subscribe for 65,843,620 shares at 24.3 Canadian cents apiece, an 83% premium to Tinka's three-month volume-weighted average price and a 45% premium to its six-month volume-weighted average price.
Buenaventura agreed to a 24-month equity lockup on the shares and a standstill provision. Closing is expected Jan. 7, 2020.
Tinka said Dec. 19 that it will use net proceeds to develop Ayawilca, for further exploration, and for working capital and general corporate purposes.
Sentient Global Resources Fund IV LP, an insider of Tinka, exercised its preexisting participation rights and subscribed for a minimum of 10,288,066 shares at the same price for C$2.5 million.
Upon closing of the placement and assuming no additional preemptive rights are exercised, Sentient will hold 74,036,831 Tinka shares, or about 21.7% of the company's shares.
Tinka said it may issue an additional 12 million shares for C$2.9 million in additional proceeds if more preemptive rights are exercised.