On May 17th, ReconAfrica (CVE: RECO) announced that they closed a C$41.4 million bought deal. The company sold 4,358,040 units at a price of C$9.50 each. Each unit equates to one share plus one-half warrant which can be exchanged into common at a price of C$14.50.
Haywood Capital Markets resumed coverage on the company following this financing, they are the only investment bank to have coverage on the name. Their analyst Christopher Jones gave ReaconAfrica a C$12.50 price target and a buy rating. He also gave ReconAfrica a top pick status saying that the bought deal “significantly exchanged the risk/reward profile, even after the rally in the share price.”
Jones says that they are resuming coverage based on the use of proceeds that are planned to fund additional exploration and drilling operations in Namibia and Botswana. Jones says that management noted that the National Geographic article is both false and defamatory and, “was a concerted effort to drag the company’s reputation through the mud by making publicly false and fabricated statements by short sellers.”
Jones believes that the companies outlook remains supportive but admits that this company is still in its early days for exploration. He believes that over the summer the company will release significant news around the drilling of the 6-1 exploration well, ongoing interpretation of the data from the 6-2 well, and the acquisition and interpretation of the 450 kms of 2D seismic.
Information for this briefing was found via Sedar and Refinitiv. 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.
