Company intends to use the net proceeds of the Private Placement for the accelerated exploration and development of the Company's high-grade copper-gold-silver Soledad Project
Gold Fields raises stake in Chakana Copper to 20% after private placement. (Credit: Tumisu from Pixabay)
Chakana Copper Corp. (TSXV: PERU) (OTCQB: CHKKF) (FSE: 1ZX) (the “Company” or “Chakana”), is pleased to announce that it has completed the first tranche of a non-brokered private placement of 14,186,000 common shares of the Company at a price of C$0.50 per common share for gross proceeds of C$7,093,000 million (the “Private Placement”). The Company is reserving the right to increase the Private Placement to issue a total of up to 24,000,000 common shares at C$0.50 per share to raise a total of up to C$12 million.
Pursuant to an agreement between the Company and Gold Fields Nazca Holdings Inc. (“Gold Fields”), a wholly owned indirect subsidiary of Gold Fields Limited (see news release dated April 19, 2019), Gold Fields has exercised its participation right and is also increasing its pro rata ownership interest to 19.99% of the outstanding common shares of Chakana from its current position of 16.80% of the outstanding common shares. Based on the first tranche closing, Gold Fields’ current participation is 5,810,000 new shares for total proceeds of C$2,905,000.
David Kelley, President and CEO commented: “We are excited to close the first tranche as we ramp up the exploration on the Soledad project. Having Gold Fields participate and increase their equity position to 19.99% is a great endorsement for the project. Combined with our current cash on hand, we now have $9.3 million to cover the aggressive 26,000m drill program this year to test numerous additional targets and to publish a maiden resource on several of the breccia pipes. A second drill rig will arrive on the property later this week to initiate the in-fill drilling program on the recent discoveries announced at Paloma East and Paloma West. Scout drilling continues at Huancarama with the other drill rig where twenty-two holes have been completed to date. Resource drilling will start at Huancarama once the scout drilling is completed.”
The Company intends to use the net proceeds of the Private Placement for the accelerated exploration and development of the Company’s high-grade copper-gold-silver Soledad Project located in the Ancash region of Peru and for general working capital and administrative purposes. Since restarting its 15,000m Phase 3 drill program on August 15, 2020, the Company has announced three new discoveries at Paloma East (news releases – September 17, 2020, and October 26, 2020), Paloma West (news releases – November 10, 2020, November 18, 2020, December 3, 2020, and December 16, 2020), and at the Huancarama Breccia Complex where drilling is ongoing (news releases – January 12, 2021, January 25, 2021, and February 9, 2021).
The Company paid a finder’s fee of C$112,980 on some portion of the gross proceeds of the Private Placement to certain arms-length parties who assisted the Company in introducing subscribers to the Private Placement.
All securities issued under the Offering will be subject to a four-month hold period expiring on June 10, 2021 in accordance with applicable Canadian securities laws, in addition to such other restrictions as may apply under applicable securities laws in jurisdictions outside of Canada. Final closing of this Offering is subject to final acceptance by the TSX Venture Exchange.
Source: Company Press Release