Foran Mining (TSXV: FOM) this morning announced that it has completed its previously announced private placement with Fairfax Financial, albeit on slightly modified terms. The arrangement saw the insurer invest a total of C$100 million into Foran, in support of building the first carbon neutral copper mine in Canada.
Originally set to take place in two tranches, the definitive agreement executed between the two firms saw the entire sum executed within a single tranche. The financing however does have two parts, comprised of voting and non-voting units.
Under the terms of the arrangement, a total of $50 million in units of Foran were subscribed to by Fairfax at a price of $1.80 per common share unit. Each unit contained one common share and 0.288 of a common share purchase warrant, the latter of which is valid for five years at an exercise price of $2.09 per share.
A further $50 million in company non-voting units was subscribed to by the company, at a price of $1.80 per unit. Each unit contains one common share and one common share purchase warrant, with warrants having substantially the same terms. The non-voting units convert to voting units at any time by a shareholder, other than Fairfax and its affiliates.
Proceeds from the financing are to be used to “rapidly advance” the development of the firms McIlvenna Bay project, as well as for exploration at the Hanson Lake district. The investment is reportedly part of “an effort to create a global carbon neutral mining company and advance McIlvenna Bay as Canada’s first carbon neutral copper mine.”
Following the approval by shareholders of the transaction, Foran will own up to 28.4% of the company on a partially diluted basis, assuming the full conversion of non-voting shares and warrants.
Foran Mining last traded at $2.31 on the TSX Venture.
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