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Kainantu Resources increases its previously announced private placement financing to raise C$2.7 million due to oversubscriptions

Published: 09:45 12 Jan 2022 EST

Canadian dollars
Kainantu Resources now intends to issue up to a total of 15,000,000 units at a price of C$0.18 per unit

Kainantu Resources Ltd (TSX-V:KRL) has announced an increase in its previously announced private placement financing to raise total gross proceeds of C$2.7 million now due to oversubscriptions.

The offering was originally announced on December 1, 2021, to raise gross proceeds of up to C$1.5 million and was subsequently upsized to raise gross proceeds of up to C$2 million as announced on January 4, 2022.

The company said net proceeds from the offering are intended to be used, but are not limited to, exploration programmes at its KRL North and KRL South projects leading to delineation of drilling targets, sampling and technical reports for the May River Project, and general working capital purposes.

All terms of the offering remain the same, provided that the company now intends to issue up to a total of 15,000,000 units at a price of C$0.18 per unit for aggregate gross proceeds of up to C$2.7 million under the full offering.

READ: Kainantu Resources closes first tranche for C$1.67M in upsized placing

Each Unit will be comprised of one common share of the company and one common share purchase warrant, with each warrant being exercisable for one common share at an exercise price of C$0.36 each at any time up to 36 months following the closing date of the offering, subject to earlier expiry in certain circumstances.

The company closed the first tranche of the offering on January 4, 2022. Under the first tranche it issued an aggregate of 9,268,825 units to raise gross proceeds of an aggregate of C$1,668,388.

A second and final tranche of the offering of up to an additional approximately C$1 million is expected to close on or before January 24, 2022.

Completion of the offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including acceptance of the TSX Venture Exchange (TSX-V).

In connection with the offering, the company said it may pay finder's fees to certain finders, which fees would be a cash payment equal to 6% of the gross proceeds raised by purchasers introduced by such finders, and the issuance of non-transferable compensation warrants equal to 6% of the number of units purchased by purchasers introduced by such finders.

Each compensation warrant will be exercisable for one common share at an exercise price of C$0.36 each at any time prior up to 36 months following the closing date of the offering and will be issued on substantially the same terms and conditions as the warrants, except that the compensation warrants will not be subject to an acceleration clause.

All securities issued pursuant to the offering and as payment of any finder's fees, including common shares issuable upon the exercise of warrants or compensation warrants, if any, will be subject to a hold period of four months and one day after the date of closing of the offering.

Kainantu Resources is an Asia-Pacific-focused gold mining company with two highly prospective gold projects, KRL South and KRL North, in a premier mining region, the high-grade Kainantu Gold District of Papua New Guinea (PNG).

Both of the company's projects show potential to host high-grade epithermal and porphyry mineralization, as seen elsewhere in the district. It has a highly experienced board and management team with a proven track record of working together in the region; and an established in-country partner. 

Contact the author at jon.hopkins@proactiveinvestors.com

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