AuTECO Minerals (ASX:AUT) has agreed to acquire the Green Bay Copper-Gold Project in Newfoundland, Canada, for $65 million.
As part of the deal, the company will pay an upfront consideration of $35 million in cash and $15 million in shares, followed by an additional $7.5 million cash payment and $7.5 million in shares within 18 months.
AuTECO says the transaction will be funded by a minimum $50 million two-tranche placement lead managed by Canaccord Genuity and co-managed by Argonaut Securities, Euroz Hartleys, and Shaw and Partners.
Further, retail investors have the opportunity to participate in a $3 million share purchase plan (SPP) at the same price as the placement.
The company’s board and management will subscribe for up to $5 million of the capital raising, subject to shareholder approval.
The proceeds from the placement will be used for the upfront cash consideration for the purchase and to fund an accelerated resource growth program that includes plans for 700m of underground exploration development and 40,000m of drilling to begin immediately.
AuTECO Minerals Incoming Managing Director Steve Parsons says the capital raising will enable the company to establish an exploration decline with the aim of rapidly growing resources around historical intersections.
Parsons says: “Green Bay is an exceptional acquisition opportunity, and we were extremely fortunate to be given the opportunity to acquire this asset via the administration process.
“Green Bay is an exceptional acquisition opportunity“
It is very rare for a copper asset of this size and grade with a resource of this magnitude and such immense growth potential to come up anywhere in the world, let alone in a tier-one mining location like the province of Newfoundland and Labrador.”
AuTECO Minerals is an emerging copper-gold company focused on advancing the Green Project in Newfoundland, Canada. As of 30 June 2023, the company had $6.3 million cash and cash equivalents at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: AuTECO Minerals