Mr. Antonio Berlanga reports
TELSON CLOSES $6.8 MILLION OVERSUBSCRIBED FINANCING AT 39% PREMIUM TO MARKET
Telson Mining Corp. has closed its non-brokered private
placement financing consisting of 9,124,805
units of the company at a price of 75 cents per unit for gross proceeds of
$6,843,603.
The financing was originally announced in a press release dated Sept. 26, 2018, and was closed oversubscribed by 458,138 units
representing an additional $343,604.
Each unit of the private placement consists of one common share and one-half of one transferable common share purchase warrant. Each whole
purchase warrant entitles the holder thereof to acquire one common share
of the company at a price of $1.25 for a period of two years following
the closing of the private placement. All common shares issued in
connection with the private placement are subject to a four-month-plus-one-day hold period under applicable Canadian securities laws. No
finders' fees were paid in connection with the private placement. The
total issued and outstanding common shares of the company after
completion of the private placement are 139,559,153.
The private placement included four insiders of the company subscribing
for a total of 8,008,755 units for aggregate subscription proceeds of
$6,006,566. That portion of the private placement is a related-party
transaction as defined under Multilateral Instrument 61-101. In addition, one of the insiders is a significant shareholder
with a control position in the company, for which the company previously
received shareholder consent in late 2015, in accordance with TSX Venture Exchange
policy. The company is relying on the exemptions from the formal
valuation and minority approval requirements under MI 61-101. The
company is exempt from the formal valuation and minority approval
requirements of MI 61-101 in reliance of sections 5.5(b) and 5.7(1)(a),
as the fair market value of the private placement, insofar as it
involves related parties, is not more than 25 per cent of the company's market
capitalization.
The net proceeds from private placement will be used by the company to
cover the company's requirement to contribute financing to the Tahuehueto
mine's construction rehabilitation and operation under its loan
agreement with Trafigura Mexico SA de CV and for general working
capital purposes.
Closing of this private placement also qualifies the company to request
a second tranche from its loan agreement with Trafigura for up to $5-million (U.S.), which when combined with the proceeds from the private
placement, is estimated to be sufficient capital to complete the
construction of the Tahuehueto mine, targeted for completion during the
first quarter of 2019.
Antonio Berlanga, chief executive officer, states: "We are thrilled to complete this financing
on behalf of Telson's shareholders. This above-market-priced financing,
largely subscribed to by insiders of the company, clearly demonstrates
management and insider commitment to shareholders by avoiding
discounted-market-priced dilutive financings while securing the
necessary financing to complete the Tahuehueto mine construction."
About Telson Mining Corp.
Telson Mining is a Canadian-based mining company with two
Mexican gold, silver and base metal mining projects. Telson is currently
in commercial production at its 100-per-cent-owned Campo Morado mine in
Guerrero, Mexico, and is producing zinc and lead concentrates with gold,
silver and copper as byproducts, processing an average of approximately
2,000 tonnes per day.
We seek Safe Harbor.
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