Sabina Gold & Silver Corp. said Dec. 19 that Zhaojin Mining Industry Co. Ltd. unit Zhaojin International Mining Co. Ltd. agreed to invest approximately C$66.1 million in the company by subscribing to a private placement of 24,930,000 common Sabina shares at C$2.65 apiece.
Upon completion, Zhaojin International will own approximately 9.9% of Sabina's issued and outstanding shares on a nondiluted basis and can increase its shareholding to 19.9% by a grant of participation rights in future financings, subject to certain terms and conditions.
Zhaojin International's 9.9% stake will allow it to nominate one director to the Sabina board, and it will have the right to appoint a second director if its interest increases to 19.9%.
The two companies also secured a voting arrangement under which Zhaojin International will exercise all of its votes associated with its Sabina shares in support of matters proposed by Sabina's board to its shareholders for four years after closing.
Sabina is focused on its Back River gold project in Canada's Nunavut territory. Earlier in December, the company secured approval to advance the project to the regulatory and licensing phase.
"This financing with Zhaojin provides Sabina with a cornerstone investor that has financial and technical resources to assist us in advancing the project to production," Sabina President and CEO Bruce McLeod said. "With this capital in hand, we are currently working on finalizing plans and budgets for 2018 which will focus on de-risking the project with initial preconstruction activities as well as furthering exploration activities."