AbraSilver Resource has announced a C$20m ($14.5m) non-brokered private placement of common shares, with Kinross Gold and an affiliate of Central Puerto each investing C$10m.
This will see the issuance of 50 million common shares at C$0.40 each, with both Kinross and Central Puerto owning around 4% of AbraSilver's outstanding shares upon completion.
The investment is expected to bolster AbraSilver's financial position as the company plans to use the proceeds for the exploration and development of its flagship Diablillos project in Salta Province, Argentina.
Additionally, the raised capital will support working capital and general corporate purposes.
As part of the agreement, AbraSilver will reach an investor rights agreement with each investor.
The agreement will also see formation of a technical advisory committee and a strategic and operational committee, along with standard anti-dilution and equity participation rights.
Furthermore, AbraSilver and Kinross will establish a regional partnership to jointly explore and acquire new projects in Argentina, focusing on silver, gold and copper.
The private placement is subject to a statutory hold period of four months and a day from the date of issuance and is expected to close around 26 April 2024, pending TSX Venture Exchange approval.
Additionally, AbraSilver will grant Kinross a right of first offer to acquire a significant stake in new projects in Argentina beyond Diablillos.
For projects where Kinross exercises its right of first offer, both companies will collaborate to establish an exploration programme and budget, leading to a joint venture agreement with standard funding and dilution mechanisms.
Following the investment, AbraSilver will also consolidate its common shares, subject to exchange approval, on a one-for-five basis post-consolidation.
AbraSilver president and CEO John Miniotis said: “We are very excited to welcome both Kinross and Central Puerto as important strategic shareholders and partners. Through this transaction, AbraSilver is well funded for a dual strategy to aggressively advance the Diablillos project towards a production decision and to accelerate our exploration efforts.
“The company also gains access to the deep technical expertise in mineral exploration, mine development and power generation.
“We look forward to working closely with our new partners as we embark upon the next stages of successfully advancing the development of our high-quality Diablillos silver-gold project.”
