PERTH (miningweekly.com) – The share price of ASX-listed Rafaella Resources surged on Tuesday on news that the company has struck a deal to acquire the Horden Lake polymetallic/battery metals deposit, in Quebec.
Under the terms of the agreement struck with vendor Gestion Ora-Mirage Ltée, Rafaella will pay C$4-million, of which C$400 000 will be a non-refundable deposit and the balance ill be payable within 90 days of signing.
Gestion Ora-Mirage Ltée would also receive a 1% net smelter return.
Rafaella told shareholders on Tuesday that the company had secured binding commitments for nearly 50% of the cash consideration, thereby mitigating the funding risk.
The company will raise A$1-million in an equity placement to Starboard Global and associated co-investors, at a 50% premium to Rafaella’s ten-day volume weighted average share price, or 3.5c a share, whichever is lower.
A further A$1-million will be raised through a convertible bridge loan note executed with Riverfront Global Capital, which can be drawn down in A$500 000 tranches.
Rafaella said that discussions were well under way with several parties to finance the consideration, and subsequent project development and funding options being explored include both equity and debt instruments.
Depending upon which funding options the board determines are most favourable, the two existing commitments may or may not form part of the final funding package.
Once the final funding package is determined, Rafaella will seek any necessary shareholder approvals.
The company currently has insufficient capacities to issue securities to meet the conditions precedents for the two facilities. Based on current commitments, a further C$2-million in equity may need to be raised for which there are currently insufficient capacities. To meet any required capacity requirements, shareholder approval will be sought prior to drawdown.
If Rafaella is not able to raise the balance of the consideration, then the deposit will be forfeited.
“The acquisition of the Horden Lake deposit will be, once completed, truly and immediately transformative for the company. It adds an outstanding battery metals flagship with a substantial copper/nickel deposit to the current Canadian battery metal property portfolio. The acquisition substantially boosts Rafaella’s battery metals position in Canada,” said MD Steven Turner.
“The Horden Lake property offers significant short-term upside through a programme to update the resource estimate with immediate in-fill drilling that will also quantify the additional high-value precious metals and cobalt credits available. The resource will be re-assessed in relation to the higher commodity price environment that is reflective of the growing demand for these battery metals. The Horden Lake deposit is now located close to upgraded and improved infrastructure and benefits from having a significant amount of known resource tonnage located close to surface.”