TORONTO (miningweekly.com) – Toronto-based Chariot Resources has agreed to sell 35,7-million shares for a total of C$10,7-million to Solway Finance, and will use the proceeds to fund its share of expenditure at the Mina Justa copper project, in Peru, over the next year or so.

Chariot owns 70% of the project and Korea Resources Corporation (owned by the Korean government) and LS-Nikko Copper own the balance.

The partners recently approved another $15-million of investment in the asset, of which Chariot's share amounts to $10,5-million.

The money will go towards the environmental- and social-impact assessment approval process, permitting for the project, the acquisition of key surface rights, upgrading the planned concentrator to feasibility level and broadening community relations initiatives.

“The budget also contains a provision for the start of limited construction of critical early infrastructure in 2010,” Chariot said in a statement.

Last month, Chariot shareholders re-elected the company's incumbent board of directors, rejecting a rival slate of nominees proposed by a group of dissident shareholders.

CEO Ulli Rath said at the time the company would launch a process to seek a buyer for the company to realise value for shareholders.

The firm said it has opted for the offering to ensure investment continues at Mina Justa without creating a drain on cash reserves during the sale process.

"We believe that the activities proposed by Marcobre are all important in order to keep the Mina Justa Project on its critical path,” Rath said in a statement released late on Thursday.

"These additional investments are part of a group of initiatives to add value, as well as to move the project closer to shovel-ready status during the ongoing process to sell the company.”

Solway Finance will buy the Chariot shares at C$0,30 apiece, and will own about 18,8% of the company's issued and outstanding shares.

Solway will have the right to participate in future equity offerings to maintain its ownership percentage after closing and will have an option to appoint a nominee to the board of directors of Chariot or its local subsidiary that holds the Mina Justa project, in Peru.

Chariot shares slid 5,3% on Friday morning, to C$0,27 apiece by 11:46 in Toronto.

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