Chile-Focused Aclara Resources Seeks To Raise $59.5 Million In TSX IPO, $66.9 Million In Private Placement

Rare earth mineral resources company Aclara Resources Inc. is looking to go public on the Toronto Stock Exchange. The firm filed its final prospectus on Thursday, seeking to raise a total of $59.4 million in its initial public offering.

The proposed offering will be conducted through the issuance of 35.0 million common shares selling at $1.70 per share. The shares are expected to begin trading at TSX on December 10, 2021, under the symbol “ARA”.

The company is a wholly-owned subsidiary of UK-based mining firm Hochschild Mining after the latter acquired it in October 2019. The IPO is part of the conditions set for the proposed demerger of 80% equity which would effectively separate Aclara Resources from its parent company.

Concurrent to the IPO, the firm also signed subscription agreements with Hochschild Mining and Pelham Investment, an investment firm controlled by Hochschild Mining’s chairman, Peruvian businessman Eduardo Hochschild. The private placement involves purchasing 39.4 million shares at the same IPO price for total proceeds of $66.9 million.

Pelham also committed to purchase 9.9 million shares or 28.2% of the initial public offering. At the closing of both the IPO and the concurrent private placement, it is expected that Hochschild Mining and Pelham Investment will own 20.0% and 36.7% of Aclara Resources, respectively.

The IPO is being made through a syndicate of underwriters co-led by RBC Capital Markets and Canaccord Genuity. The underwriters are granted an over-allotment option to purchase an additional 5.25 million shares at the same IPO price. In addition, Hochschild Mining is granted the right to subscribe to up to 1.31 million shares only if the underwriters exercised the over-allotment option.

Expected total gross proceeds from both the offering and the private placement are $117.7 million, which can increase to $128.3 million should both over-allotment options be exercised. Net proceeds are expected to be used on the exploration and development of the Penco Module, exploration of potential new modules, and for working capital and general corporate purposes.

According to its prospectus, Aclara Resources is a “development-stage rare earth mineral resources company with 451,585 hectares of mining concessions” located in the Maule, Ñuble, Biobío and Araucanía regions of Chile.

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.

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