Benchmark Metals Inc. (CVE:BNCH) said it has closed the first tranche of its previously announced private placement and expects a second closing next week to complete the over-subscribed offering for total gross proceeds of at least $50,267,662.
The net proceeds of the offering will be used to fast-track the group's Lawyers gold-silver project towards a production decision in 2022.
READ: Benchmark Metals encouraged by early drill results from Cliff Creek zone at Lawyers project, which underscore mining potential
Major milestones and work programs planned over the next two years include:
- Permitting, engineering and baseline environmental activities already in progress;
- 2020 - drilling expanded up to 100,000 drilling metres;
- 2021, Q1 - Mineral Resource Estimate;
- 2021, Q2 - Preliminary Economic Assessment (PEA);
- 2021 - 200,000 metres of drilling; and
- 2022 - updated Mineral Resource Estimate and Feasibility Study (FS).
The first tranche under the placement comprised 16,260,847 hard dollar units at $1.30 (HD Units), 2,585,500 flow-through A units at $1.56 (FT A Units) and 9,305,040 flow-through B units at $1.75 (FT B Units), for gross proceeds of $41,456,301, inclusive of $1,365,198 in connection with the concurrent non-brokered private placement of 618,152 HD Units and 360,000 FT A Units.
Each HD Unit, FT A Unit and FT B Unit consists of one common share of the company and half of a transferable warrant which is exercisable to purchase one additional share at an exercise price of $1.80 per share until September 18, 2022.
The brokered offering is being completed under an agency agreement dated September 18, 2020, between the company, Sprott Capital Partners LP as lead agent, Clarus Securities Inc. and PI Financial Corp.
Eric Sprott acquired 7,692,308 HD units under the offering for investment purposes and now owns or controls 23,285,642 Benchmark shares and 11,642,821 warrants of the company, representing approximately 15.6% of the issued and outstanding shares on a non-diluted basis, and would own approximately 21.7% of the issued and outstanding shares on a partially diluted basis assuming the exercise of warrants.
The group noted that Sprott has entered into a written agreement that restricts him from exercising warrants if such exercise would result in his holding 20% or more of the issued and outstanding shares, pending the receipt of disinterested shareholder approval at the next annual meeting of the company, expected to held prior to the end of 2020.
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