Funding continues to trickle down from major metals producers into the junior space. Agnico Eagle (TSX: AEM) this morning was the latest major to take a stake in a junior, after making an investment in ATEX Resources (TSXV: ATEX).
The funding will see Agnico take a 13.21% interest in ATEX in exchange for a US$40 million investment. The investment consists of Agnico acquire 33.9 million units of ATEX at a price of C$1.63 per unit, with each unit consisting of one common share and one half of a common share purchase warrant. Warrants are valid for a period of five years and contain an expiry of five years from the date of issuance. An acceleration clause is also in play.
In making the investment, Agnico stated that the move was consistent with its “historical practice of strategic equity investments in projects with high geological potential.” The major specifically outlined that ATEX offers exposure to an early stage copper-gold exploration project in Chile.
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ATEX’s flagship project, Valeriano, is found in the Atacama region of northern Chile. The project contains a surface alteration zone said to be over 10 kilometres long and 4 kilometres wide, with a 2023 resource estimate outlining that the project contains over 9.01 million ounces of gold, 15.5 billion pounds of copper, 43.6 million ounces of silver, and 90,000 tonnes of molybdenum, all within the inferred category.
As part of the investment, Agnico will obtain certain investor rights, including the right nominate one person to the board of directors, and top-up rights in any future funding round, with the company having the ability to obtain up to a 19.99% interest in ATEX.
ATEX has indicated that a portion of its funds from the financing will be utilized to repay an outstanding US$15 million credit facility.
ATEX Resources last traded at $1.45 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
