Mexico-focused resource group Telson Mining Corp (CVE:TSN) has closed an oversubscribed placing to bring in over $6.84 million, which will allow it to finance the Tahuehueto mine's construction and operation.
The firm issued over 9.12 million units at $0.75 each for gross proceeds of $6,843,603 - that's a whopping premium of 39% to the market close price of the shares on October 9 of $0.455.
The financing, originally announced in late September, was closed oversubscribed by 458,138 units, or an additional $343,604.
"We are thrilled to complete this financing on behalf of Telson's shareholders," said Antonio Berlanga, chief executive at Telson.
"This above-market-priced financing, largely subscribed to by insiders of the company, clearly demonstrates management and insider commitment to shareholders by avoiding discounted-market-priced dilutive financings while securing the necessary financing to complete the Tahuehueto mine construction."
"The net proceeds from private placement will be used by the company to cover the company's requirement to contribute financing to the Tahuehueto mine's construction rehabilitation and operation under its loan agreement with Trafigura Mexico SA de CV and for general working capital purposes," it said in today's statement.
Each unit consisted of one share and one-half of a share purchase warrant.
Each whole warrant entitles the holder to acquire one company share at$1.25 for two years following closing.
The placing included four insiders of the company, who subscribed for a total of 8,008,755 units for total subscription proceeds of $6,006,566.
Two Mexican projects
Telson has two Mexican gold, silver and base metal mining projects.
in May it revealed its Campo Morado mine located in Guerrero, Mexico had begun commercial production three months ahead of schedule.
The goal at Campo Morado is to increase throughput at the mill to 2,500 tonnes per day by Q3/Q4 of 2018.
Telson's Tahuehueto project in north-western Durango State, Mexico is currently in pre-production at approximately 110 tonnes per day using a toll mill for processing and has entered a construction phase with a timeline to be producing on site in its own mineral processing plant capable of milling at least 1,000 tonnes per day towards the end of 2018.
Telson shares in Toronto shot up over 16% to $0.53.
Giles Gwinnett is at [email protected]