Diversified mining company BHP will invest C$100-million in Canadian junior Filo Mining, which is developing a copper/gold/silver project straddling the border between Argentina and Chile.
Toronto-listed Filo Mining on Monday announce that it would issue 6.27-million common shares in a private placement to BHP at C$15.95 a share, representing a 12% premium to the 20-day volume-weighted average trading price. Filo Mining’s stock closed at C$14.30 a share on Friday.
Upon closing of the private placement, BHP will own about 5% of Filo Mining.
Commenting on the private placement, Filo president and CEO Jamie Beck welcomed BHP as its newest shareholder, stating that the investment was a “significant endorsement” of the Filo del Sol project, team and strategy.
“The private placement provided us with an opportunity to raise funds at a premium to market, limit dilution and minimise our financing costs. This secures the next leg of funding required for us to rapidly expand our exploration plans at Filo del Sol as we define this remarkable deposit,” said Beck.
In connection with the placement, BHP will be granted certain participation and top-up rights, allowing BHP to maintain its ownership interest from time to time.
Filo and BHP also agreed to form a joint advisory committee to share expertise, exploration concepts, and discuss future project development.
Filo said it would use the proceeds of the placement for exploration and development of the Filo del Sol project and for working capital and general corporate purposes.
A prefeasibility study assigned the Filo del Sol project an aftertax net present value of C$1.28-billion and an internal rate of return of 23%. The project will produce, on average, 67 000 t/y of copper, 159 000 oz/y of gold and 8.65-million ounces of silver at a C1 cost of $1.23/lb.