Cormark Securities Inc, Sprott Capital Partners LP and Canaccord Genuity Corp, as co-lead underwriters and joint bookrunners on behalf of a syndicate of underwriters, had organically agreed to purchase 4,651,200 flow-through (FT) units at C$4.30 each and 4,255,400 units at C$2.35 each, according to a statement.
But the company and underwriters agreed later Thursday to increase the size of the financing. Now 6,383,000 units, instead of 4,255,400 units, will be purchased at C$2.35 each, O3 Mining said in a follow-up statement.
The gross proceeds from the sale of the FT units will be used to incur eligible "Canadian exploration expenses" that qualify as "flow-through mining expenditures" under the Income Tax Act related to the company's projects in Québec.
The qualifying expenditures will be renounced in favour of the FT unit subscribers with an effective date no later than December 31, 2020 and in the aggregate amount not less than the total amount of the gross proceeds raised from the issuance of the units.
In addition, O3 Mining said the net proceeds will be used for working capital and general corporate purposes.
Each FT unit consists of one common share and one-half of one transferable common share purchase warrant to be issued on a non-flow-through basis. Each unit will consist of one common share and one-half of one warrant, which entitles the holder to purchase one common share for C$3.25 for a period of 24 months following the closing of the offering scheduled to close on or about June 18, 2020.
The warrants are callable should the daily volume-weighted average trading price of the company’s shares of on the TSX Venture Exchange exceed C$3.85 for 10 consecutive trading days, at any time during the period beginning on the date that is four months and one day from the closing date and ending on the date the warrants expire (call trigger).
Following a call trigger, the company may give notice in writing to warrant holders that any warrant that remains unexercised shall expire 30 days following the date on which the notice is given.
O3 Mining has also granted the underwriters an option to sell up to an additional 638,310 units. The option may be exercised up to 48 hours prior to the closing date of the offering. In addition, the company may issue up to $2 million units or FT units to purchasers on a President's List to be identified by the company.
--UPDATES to add details on the upsizing--
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