Non-brokered offering is expected to finance exploration and drilling
By Devika Patel
Knoxville, Tenn., June 26 – Margaux Resources Ltd. said it will conduct a $1 million non-brokered private placement of convertible debenture units and a C$1 million private placement of stock.
The company will sell units of a $1,000 1% five-year convertible debenture, 2,000 warrants and three rights for additional debentures. The debenture converts to common stock at C$0.50 per share. The company may force conversion. Each warrant is exercisable at C$0.55 for five years.
Margaux will also sell 2 million flow-through common shares at C$0.50 apiece.
The conversion price, price per share and warrant strike price are 31.58%, 31.58% and 44.74% premiums to the June 25 closing share price of C$0.38.
Settlement of the first tranche is expected Aug. 8.
Proceeds will be used for exploration and drilling at the Jersey-Emerald Tungsten-Zinc Project.
“This offering provides Margaux with a framework to raise a portion of the funds required to satisfy the staged option payments due to Sultan Minerals Inc., related to the acquisition of the Jersey-Emerald Tungsten-Zinc Property in Salmo, B.C.,” president and chief executive officer Tyler Rice said in a press release.
“The offering will also fund the initial stages of an extensive drilling campaign with the intent of investigating a tungsten resource with a view to possible commercial production. We remain confident in the long-term forecast for tungsten pricing, in particular given continued export quotas on tungsten out of China, which currently produces over 80% of the world's supply of tungsten, and potential supply constraints from existing mines that are exhausting economic production grades. Additionally, world supply constraints on zinc have resulted in increases in the price of zinc since Margaux entered into the option agreement with Sultan Minerals Inc.”
The oil explorer is based in Calgary, Alta.
| Issuer: | Margaux Resources Ltd.
|
| Issue: | Units of $1,000 convertible debenture, 2,000 warrants and three rights for additional debentures, flow-through common shares
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| Amount: | $1 million, C$1 million
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| Agent: | Non-brokered
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| Pricing date: | June 26
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| Settlement date: | Aug. 8
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| Stock symbol: | TSX Venture: MRL
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| Stock price: | C$0.38 at close June 25
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| Market capitalization: | C$6.3 million
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| Units
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| Amount: | $1 million
|
| Maturity: | Five years
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| Coupon: | 1%
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| Conversion price: | C$0.50
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| Conversion premium: | 31.58%
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| Call: | Yes
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| Warrants: | 2,000 warrants per unit
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| Warrant expiration: | Five years
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| Warrant strike price: | C$0.55
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| Stock
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| Amount: | C$1 million
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| Shares: | 2 million
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| Price: | C$0.50
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| Warrants: | No
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