Erdene Resource Development Corp has closed its bought deal financing for gross proceeds of C$13.8 million. Funds from the oversubscribed financing will advance the company’s prospects in southern Mongolia.
The offering was led by Paradigm Capital, with a syndicate including Canaccord Genuity Corp. The company issued almost 18 million common shares at a price of C$0.77 per share, including the full exercise of the underwriters’ 15% over-allotment option. Multiple institutional investors from Canada and abroad participated in the offering.
In consideration for their services, the underwriters received a cash commission of $828,000 representing 6% of the gross proceeds of the offering and 1,075,324 compensation warrants representing 6% of the shares issued. Each compensation warrant is exercisable for 24 months from closing and entitles the holder to purchase one share for $1.20 per share.
The company intends to use the net proceeds to advance its high-grade Bayan Khundii and Altan Nar gold projects, and to further explore and develop its other gold properties in southwest Mongolia, as well as for working capital and general corporate purposes.
A drilling program of approximately 20,000 metres is expected to commence in April 2017 at Bayan Khundii.
“We are extremely pleased with the strong interest shown in the financing which was significantly oversubscribed. It is our pleasure to welcome these high calibre shareholders into Erdene”, said Erdene’s president and CEO Peter Akerley. “We now have the financial capacity to significantly advance our promising gold projects in southwest Mongolia.”