Otterburn Resources Corp and K92 Holdings International Ltd have appointed a syndicate of agents to sell, by way of a private placement, approximately $15 million of special warrants of Otterburn. The net proceeds of the offering are intended to be used to conduct work at K92’s Kainantu property.
K92 is planning to carry out further exploration and resource delineation work and to refurbish the existing mine and mill. Otterburn and K92 also intend to use some of the proceeds for general corporate purposes.
The syndicate is led by TD Securities Inc and includes Canaccord Genuity Corp, Haywood Securities Inc, Euro Pacific Canada Inc, Salman Partners Inc and Wolverton Securities Ltd.
Each special warrant represents the right of the holder to receive, without payment of any additional consideration or need for further action, one common share of Otterburn, on the earlier of: (i) four months and a day after closing of the offering; and (ii) the filing of a final prospectus qualifying the common shares underlying the special warrants.
The closing of the offering of special warrants will occur after or concurrently with the closing of the previously announced acquisition by Otterburn of K92. The closing of the offering of special warrants is expected to occur in June 2015 and is subject to receipt of all necessary regulatory approvals, including approval TSX Venture Exchange.
Earlier this year Otterburn announced that K92 had completed the purchase of Barrick Kainantu Limited (BKL) from Barrick Gold Corporation.
BKL held the Kainantu Gold Project at which an initial NI 43-101 compliant resource estimate at the Kora-Eutompi and Irumafimpa deposits confirmed 240,000 ounces of gold in the indicated category and 1.84 million ounces in the inferred category.