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Colorado Resources to raise C$7.2M, acquire remaining 49% stake in KSP project

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Essential Metals & Mining Insights - August 2020


Colorado Resources to raise C$7.2M, acquire remaining 49% stake in KSP project

Colorado Resources Ltd. said Aug. 4 that it will raise up to C$7.2 million through nonbrokered private placements of 10 million units at 26 cents apiece and 12,720,000 flow-through units at 36.5 cents apiece.

Each unit will consist of 1 common share and 0.5 of a nontransferable share purchase warrant, with each whole warrant exercisable at 45 cents per share for 30 months. Each flow-through unit will comprise 1 flow-through common share and 0.5 of a warrant with the same strike terms.

The flow-through units are part of a donation arrangement structured by PearTree Securities Inc., through which Goldcorp Inc. is expected to be the ultimate holder. Goldcorp will also buy 4,240,000 units directly from Colorado Resources.

Upon closing of the placements, expected on or before Aug. 31, Goldcorp will own about 14.25% of Colorado Resources' outstanding share capital.

The company will use the proceeds for general working capital and to expand its 2017 exploration program.

Colorado Resources also reported the signing of an amending agreement with Seabridge Gold Inc.'s SnipGold Corp. subsidiary to acquire the remaining 49% stake in the KSP gold project in British Columbia by paying C$1 million in cash and issuing 2 million shares to Seabridge Gold.

The company will also grant Seabridge Gold a 2% net smelter royalty over the property, half of which may be repurchased at any time for C$2 million. The deal remains subject to TSX Venture Exchange approval.