Metals Update 30/04/2021

Oroco Resource to increase interest in Santo Tomas

Oroco Resource Corp. has entered into agreements with Ruben Rodriguez Villegas of Mexico City to acquire 25 shares of Xochipala Gold SA de CV for $1.5-million (U.S.). Xochipala Gold holds 100 per cent of the registered title (85 per cent of the beneficial ownership) to the seven core concessions of the company’s Santo Tomas project. The shares of Xochipala Gold being acquired currently represent 8.5 per cent of the beneficial ownership of the core concessions.

Background

Prior to reaching the current agreements with Mr. Rodriguez, the company held all 180 issued shares of Xochipala Gold. Mr. Rodriguez held a right to 50 of the shares as well as a 0.5-per-cent net smelter return royalty in the core concessions. The company held an option, through its wholly owned subsidiary Desarrollos Copper SA de CV, to acquire all of Mr. Rodriguez’s rights and interest in the shares for payments totalling $16-million (U.S.).

The company has entered into agreements with Mr. Rodriguez to:

  1. Purchase Mr. Rodriguez’s right to 25 of the shares for $1.5-million (U.S.);
  2. Register to Mr. Rodriguez the legal title to the remaining 25 shares to which he has a right.

In committing to the agreements with Mr. Rodriguez, the company determined that it would not proceed with the Desarrollos option.

The acquisition of Mr. Rodriguez’s right to 25 of the shares increases the company’s current interest in Xochipala Gold to 86.1 per cent and its current net interest in the core concessions to 73.2 per cent. The share purchase provides Oroco with the opportunity to acquire up to 85.5 per cent of the core concessions with a project investment of up to $30-million, an increase of 4.5 per cent.

Goldsource Mines increases private placement to $11M

In connection with its previously announced bought deal financing, Goldsource Mines Inc. and Cormark Securities Inc. and Sprott Capital Partners have agreed to increase the size of the previously announced financing. The company will now issue 100 million units of the company at a price of 11 cents per unit for gross proceeds of $11-million. The company has also granted the underwriters an option to sell up to an additional 15 million units at the offering price up to the closing of the offering, which would increase the aggregate gross proceeds to approximately $12.7-million if exercised in full.

Each unit will consist of one common share of the company and one-half of one common share purchase warrant. Each warrant will entitle the holder to acquire one common share of the company at an exercise price of 14 cents for a period of 24 months following the closing of the offering.

The net proceeds from the offering will be used for continuing exploration and prefeasibility work at the Eagle Mountain gold project in Guyana, working capital and general corporate purposes.

The offering is scheduled to close on or about May 20, 2021, and is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory and other approvals, including the approval of the TSX Venture Exchange.

FPX Nickel 24,769,800-share prospectus offering

Effective March 31, 2021, the company’s short form prospectus dated March 31, 2021, was filed with and accepted by the TSX Venture Exchange, and filed with and receipted by the British Columbia and Ontario securities commissions, pursuant to the applicable securities acts.

The TSX Venture Exchange has been advised that closing occurred on April 7, 2021, for gross proceeds of $16,100,370 (including partial exercise of the underwriters’ overallotment option).

Underwriters:  Paradigm Capital Inc. and Cormark Securities Inc.

Offering:  24,769,800 shares (including partial exercise of overallotment option)

Share price:  65 cents per share

Underwriters’ commissions:  an aggregate of $966,022.20 cash and 1,486,188 compensation options (Each compensation option is exercisable to purchase one share at an exercise price of 65 cents per share up to April 7, 2021.)

Overallotment option:  The company granted to the underwriters an option to purchase an additional 15 per cent of the securities issued. The underwriters exercised 3,230,800 option shares at closing and have 30 days from closing to exercise the remaining portion of the overallotment option.

For further details, please refer to the prospectus and news releases dated March 17, 2021, March 18, 2021, and April 8, 2021, all of which are filed on SEDAR.