Toronto-based mining company Dalradian Resources Inc (TSX: DNA) has struck a private placement and warrant exercise agreement that will generate about $84.75 million in funding. Of the total amount, $50 million will be invested by Orion Mine Finance Group, a U.S. mining-focused private equity firm. With the transaction’s completion, Orion will own about 9.75 percent of the company’s issued and outstanding shares. Dalradian, which is focused on developing its Curraghinalt Gold Project in Northern Ireland, said it will use the proceeds for working capital purposes.
PRESS RELEASE
Dalradian to receive C$84.75 million through Private Placement and Warrant Exercise
TORONTO, ONTARIO–(Marketwired – Oct. 10, 2017) –
Dalradian Resources Inc. (TSX:DNA)(AIM:DALR) (“Dalradian” or the “Company”) is pleased to announce that it has entered into subscription agreements with each of Orion Mine Finance II LP (“Orion”) and Osisko Gold Royalties Ltd (“Osisko”) pursuant to which Orion will make an investment of C$50 million and Osisko will make an investment of C$28.25 million into the Company by way of a non-brokered private placement, for gross proceeds of C$78.25 million (the “Private Placement”). In addition, Osisko plans to exercise 6.25 million warrants at $1.04 later today, bringing the total funding to approximately C$84.75 million (approximately £51 million).
Pursuant to the Private Placement, Orion will acquire 34,013,605 common shares of Dalradian (the “Common Shares”) and Osisko will acquire 19,217,687 Common Shares, each at a price of C$1.47 per Common Share (the “Issue Price”). The Issue Price represents a 7% premium to the closing price of the Common Shares on the Toronto Stock Exchange on October 6, 2017. The Company intends to use the proceeds of the Private Placement for general working capital purposes.
Upon closing of the Private Placement, Orion will own approximately 9.75% of Dalradian’s issued and outstanding common shares and Osisko will own approximately 9.1% of Dalradian’s issued and outstanding common shares, in each case after giving effect to the warrant exercise by Osisko.
Patrick F.N. Anderson, Dalradian’s CEO, commented, “This is a strong vote of confidence in both the Curraghinalt Gold Project and in Northern Ireland as an investment destination by two highly respected mining finance groups. Today’s placement, together with all recent warrant exercises, will provide the company with additional equity funding in excess of C$110 million. This means that the company is now well-funded to move Curraghinalt through permitting, while continuing to expand and improve the value of the project through further investment in exploration and engineering.”
Michael Barton, Portfolio Manager at Orion Resource Partners said, “Orion is delighted to become a meaningful investor in one of the most exciting undeveloped gold deposits globally. We look forward to working with Dalradian as Curraghinalt moves through permitting and into construction.”
Sean Roosen, Chairman and CEO of Osisko said, “We are very pleased to participate in the advancement of one of the world’s top undeveloped gold projects in a new emerging gold district. We look forward to working with Dalradian management, Orion and Dalradian’s stakeholders to provide the necessary funding for the realization and development of the Curraghinalt Gold Project.”
The subscription agreements entered into with Orion and Osisko contain various covenants and rights, including among other things, a standstill, participation rights in favour of the investors to maintain their pro rata interest in Dalradian and rights to match other offers for project financing. In addition, Dalradian has granted Orion the right to designate one nominee to the board of directors of Dalradian and a period of exclusivity with respect to the negotiation of future project financing.
Closing of the Private Placement is anticipated to occur on or prior to November 30, 2017 and the subscription by each of Orion and Osisko are cross conditional. Closing of the Private Placement is also subject to certain other conditions, including the submission by the Company of its application to obtain planning permission from the Department of Infrastructure (Northern Ireland) to build a mine at the Curraghinalt Gold Project and the receipt of all required regulatory approvals, including the conditional approval of the Toronto Stock Exchange. The Company intends to apply for the admission of the Common Shares issuable in connection with the Private Placement on the AIM market of the London Stock Exchange as soon as practicable. All securities issued in the Private Placement will be subject to a statutory hold period in Canada of four months and one day from closing.
This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the U.S. Securities Act, or the securities laws of any state of the United States and may not be offered or sold within the United States (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.
About Dalradian Resources Inc.
Dalradian Resources Inc. is a mineral exploration and development company that is focused on advancing its high-grade Curraghinalt Gold Project located in Northern Ireland, United Kingdom.
Contact Information:
Marla Gale
Vice President Communications
+1 416 583 5600
investor@dalradian.com
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett / Richard Tonthat
+44 (0)20 7383 5100
Canaccord Genuity Limited (Broker)
Henry Fitzgerald-O’Connor / Martin Davison
+44 (0)20 7523 8000
Photo courtesy of Dalradian Resources Inc