Mr. Alex Black reports
RIO2 PRICES C$25 MILLION MARKETED PUBLIC OFFERING AND US$5 MILLION NON-BROKERED PRIVATE PLACEMENT
Rio2 Ltd. has priced its previously announced marketed public offering of common shares of the company at a price of 65 cents per common share. Additionally, the company's previously announced non-brokered private placement of common shares to Wheaton Precious Metals Corp. will also be conducted at a price of 65 cents per common share.
Rio2 equity offering
Scotiabank, CIBC Capital Markets and Raymond James, as joint bookrunners and co-lead underwriters, along with Cantor Fitzgerald Canada Corp., Sprott Capital Partners LP and Cormark Securities Inc., will act as the underwriters for the offering. Pursuant to an underwriting agreement entered into today between the company and the underwriters, the underwriters have agreed to purchase 38.5 million common shares from the company for total gross proceeds of approximately $25-million.
The company has granted the underwriters an overallotment option to purchase up to an additional 15 per cent of the common shares issued pursuant to the offering on the same terms exercisable in whole or in part, at any time and from time to time, up to 30 days from and including the closing date of the offering.
Not less than $20-million (U.S.) of the net proceeds of the offering plus the proceeds of the private placement will be used to finance development of the company's Fenix gold project and associated mine and camp infrastructure (which, for greater certainty, includes development of related infrastructure by Lince SA, a wholly owned subsidiary of the company). The remaining combined proceeds are expected to be used for general working capital purposes. Any proceeds from the exercise of the overallotment option will be added to the company's working capital.
Pursuant to the terms of the underwriting agreement, the underwriters will be paid a cash commission equal to 6.0 per cent of the gross proceeds of the offering (including any gross proceeds raised on the exercise of the overallotment option), subject to a reduction to 4 per cent of the gross proceeds of the offering in respect of certain institutional subscribers and a reduction to 1 per cent of the gross proceeds of the offering for subscribers from the company's president's list.
The common shares are being offered: (i) to the public in each of the provinces and territories of Canada, except for Quebec; (ii) in the United States, only to qualified institutional buyers (as defined in Rule 144A under the U.S. Securities Act of 1933, as amended), in a private placement exempt from the registration requirements of the 1933 Act; and (iii) internationally, as permitted.
The company expects to file an amended and restated preliminary short form prospectus in connection with the offering today. The prospectus will remain subject to completion but contains important detailed information about the company and the proposed offering. Prospective investors should read the prospectus and the other documents the company has filed before making an investment decision. Following filing of the prospectus, copies may be obtained from the underwriters by e-mail at firstname.lastname@example.org or by request to the company. A copy of the prospectus will also be available under the corporate profile of the company on SEDAR.
The offering is scheduled to close on or about Aug. 6, 2021, and is subject to customary closing conditions, including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the securities regulatory authorities and the TSX Venture Exchange. The completion of the offering is also subject to the completion of the private placement (as described below).
Rio2 private placement
As contemplated by the non-binding term sheet announced by the company yesterday, under the private placement, Wheaton has agreed to purchase 9,792,880 common shares from treasury at the price of 65 cents for proceeds of $6,365,372 (approximately the Canadian-dollar equivalent of $5-million (U.S.)). The proceeds from the private placement will be used to further finance development of the Fenix gold project and associated mine and camp infrastructure (which, for greater certainty, includes development of related infrastructure by Lince).
The private placement is scheduled to close on or about Aug. 6, 2021, and is subject to customary closing conditions, including, but not limited to, the receipt of all necessary regulatory and other approvals, including the approval of the TSX Venture Exchange. The completion of the private placement is also subject to the concurrent completion of the offering.
DLA Piper (Canada) LLP is acting as legal counsel to Rio2 in respect of the offering and the private placement. Borden Ladner Gervais LLP is acting as legal counsel to the underwriters in respect of the offering. McCarthy Tetrault LLP is acting as legal counsel to Wheaton in respect of the private placement.
About Rio2 Ltd.
Rio2 is a mining company with a focus on development and mining operations with a team that has proven technical skills, as well as a successful capital market record. Rio2 is focused on taking its Fenix gold project in Chile to production in the shortest possible time frame based on a staged development strategy. In addition to the Fenix gold project in development in Chile, Rio2 continues to pursue additional strategic acquisitions where it can deploy its operational excellence and responsible mining practices to build a multiasset, multijurisdiction precious metal company.
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