Glencore Drops $5 Million Into Stillwater Critical Minerals For 9.99% Stake
Glencore is evidently still interested in projects being conducted by exploration companies, electing this morning to take a 9.99% stake in Stillwater Critical Minerals (TSXV: PGE).
The transaction will see the mining major drop $4.94 million to acquire 19.8 million units of Stillwater at a price of $0.25 per unit, a major premium over the $0.165 close experienced by the company in yesterday’s session. Each unit consists of one common share and 0.70 of a common share purchase warrant, with warrants being valid for three years and containing an exercise price of $0.375 per share.
The expiry of the warrants may be accelerated in the event that the company trades about $0.5625 for a period of 20 consecutive trading days.
All told, the company will have a 9.99% stake on a non-diluted basis, and a 15.87% interest on a partially diluted basis. Proceeds from the funding are to be used to develop Stillwater’s nickel projects in North America as well as for working capital and general and administrative expenses.
READ: After Two Rejected Offers, Glencore Now Wants Teck Resources’ Steelmaking Coal Unit
The investment comes with the added benefit of access to Glencore’s technical expertise, with a technical committee to be formed with members from the two companies.
“This represents a major step forward for Stillwater as we advance our flagship Stillwater West project with the vision of becoming a large-scale source of battery and precious minerals that are now listed as critical in the US, and elsewhere,” commented Stillwater CEO Michael Rowley.
The flagship asset of Stillwater, the Stillwater West project, is a nickel-platinum group metals-copper-cobalt and gold project found in the Stillwater district of Montana, adjacent to Sibanye-Stillwater’s PGE Mines that has seen over 14.0 million ounces of historic palladium and platinum production.
A mineral resource estimate established earlier this year at Stillwater West outlines an initial inferred mineral resource of 1.6 billion pounds of nickel, copper and cobalt, and 3.8 million ounces of palladium, platinum, rhodium, and gold at an average grade of 0.39% nickel equivalent, based on a 0.20% cut-off.
“There are very few projects globally, and especially located within the United States, that offer the combination of grade and scale in a producing district that we see at Stillwater West. We are now booking drills and crews for our 2023 drill campaign with a focus on expansion of the high-grade nickel-copper sulphides identified in our past campaigns,” continued Rowley.
Stillwater Critical Minerals last traded at $0.165 on the TSX Venture.
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