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Oroco Resource Corp. is taking a significant step forward by announcing its intention to conduct a bought deal public offering. This initiative aims to raise approximately C$20 million through the sale of units, which will play a crucial role in advancing the company’s mining operations and strategic objectives.
The offering will be executed in collaboration with a group of underwriters led by Canaccord Genuity Corp.. By filing a prospectus supplement dated January 9, alongside its base shelf prospectus from April 23, Oroco seeks to qualify the distribution of 52,631,600 units at a price of C$0.38 per unit. Each unit consists of one common share and a warrant, providing potential investors with a pathway to future equity in the company.
Details of the Offering
The units being offered will include one common share and an associated warrant, with each warrant granting the holder the right to purchase an additional common share at an exercise price of C$0.53 for a period of 36 months following the closing of the offering. This structure is designed to provide investors with both immediate and future value.
Underwriting and Additional Options
The underwriting syndicate, led by Canaccord Genuity Corp., has been granted an over-allotment option to acquire up to 7,894,740 additional units on the same terms. This option can be exercised within 30 days following the closing of the offering, potentially increasing the total gross proceeds to approximately C$22.25 million if fully exercised. This flexibility is a strategic advantage that may attract more investors to the offering.
Expected to close around January 14, the offering is contingent upon receiving the necessary regulatory approvals, including clearance from the TSX Venture Exchange. The company emphasizes the importance of adhering to all regulatory requirements to ensure a smooth transaction.
Use of Proceeds
The funds raised through this offering are earmarked for key initiatives within Oroco’s operations. Specifically, the company plans to utilize the net proceeds for the initiation of a Pre-Feasibility Study drilling program at the Santo Tomás copper project. This project has shown promise due to significant copper porphyry mineralization identified in previous exploration efforts.
Project Background
Oroco holds an impressive 87% net interest in the core concessions, which encompass approximately 1,173 hectares of the Santo Tomás Project. Additionally, the company has an 80% stake in surrounding mineral concessions, bringing the total project area to 9,034 hectares. The project has a rich history of exploration dating back to 1968, with over 100 drill holes completed, totaling around 30,000 meters of drilling.
With the launch of drilling programs and the completion of multiple engineering studies, Oroco has taken meaningful steps toward advancing the project. The updated Mineral Resource Estimate (MRE) and Preliminary Economic Assessment (PEA) published in August reflect the continuous efforts to enhance the project’s viability and attractiveness to potential investors.
Access to Documentation
Investors interested in learning more about the offering can access the prospectus supplement and base shelf prospectus on SEDAR+, a platform designed for Canadian securities documentation. The company encourages potential investors to review these documents thoroughly, as they contain vital information about the offering and the company’s operational plans.
Furthermore, interested parties can obtain both electronic and paper copies of the prospectus supplement and base shelf prospectus, free of charge, by reaching out to Canaccord Genuity Corp. via email. This accessibility aligns with Oroco’s commitment to transparency and investor engagement.
In conclusion, Oroco Resource Corp.’s bought deal public offering represents a strategic move to secure capital for its growth initiatives while providing investors with an opportunity for future gains. As they navigate the regulatory landscape and finalize their offering, the company remains focused on leveraging its resources to maximize project potential.
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