Bluestone Resources Inc. (TSX-V: BSR) has closed its previously announced private placement financing of 53,333,333 subscription receipts at $1.50 per subscription receipt for gross proceeds of $80 million under the maximum offering.
The offering was led by Cormark Securities Inc.
Lorito Holdings S.à.r.l. and Zebra Holdings and Investments S.à.r.l. , two companies controlled by a trust settled by the late Adolf H. Lundin acquired 6,367,000 and 13,500,000 subscription receipts respectively, representing approximately 10.1% and 21.3% of the then issued and outstanding shares of Bluestone, or approximately 31.4% in aggregate, assuming the closing of proposed acquisition and the automatic conversion of subscription receipts. Lorito and Zebra did not hold any Bluestone shares previously.
Bluestone Resources has entered into a definitive agreement with Goldcorp to acquire 100% of the Cerro Blanco gold project located in Guatemala, which is owned by Goldcorp’s indirect wholly-owned subsidiary Entre Mares de Guatemala S.A., and the Mita Geothermal project located in Guatemala, which is owned by Goldcorp’s indirect wholly-owned subsidiary, Geotermia Oriental de Guatemala S.A.
Goldcorp will receive consideration at closing of US $18 million in cash, a 1% Net Smelter Return royalty on production, and common shares of Bluestone representing approximately 4.9% of the issued and outstanding shares upon completion of the transaction. Goldcorp will receive an additional US $15 million in cash upon declaration of “Commercial Production” at Cerro Blanco.
Goldcorp has also granted Bluestone a right of first refusal with respect to certain assets and equipment at the Marlin mine, also located in Guatemala. The Marlin mine will continue reclamation and revegetation activities over the next three years, followed by ongoing monitoring and maintenance activities as planned. The last ore production is set to be processed in early 2017.
The original letter of intent with Goldcorp as announced on January 11, 2017 contemplated that Goldcorp would receive a 9.9% equity ownership and would commit to fund 9.9% of all future equity financings in connection with the Cerro Blanco Project. As a result of the increase in the size of the offering, Goldcorp has agreed to reduce its equity interest from 9.9% to 4.9% and forego its right to appoint a nominee to Bluestone Resources board in exchange for releasing from its obligation to provide further equity financing.
National Bank Financial acted as financial advisor to Goldcorp. The acquisition is expected to close on or before May 31, 2017.
photo credit: Bluestone Resources