Dalradian Resources Inc. (TSX: DNA; LSE-AIM: DALR) has entered into subscription agreements with each of Orion Mine Finance II LP and Osisko Gold Royalties Ltd. (TSX/NYSE: OR) to raise gross proceeds of $78.25 million.
Orion will make an investment of $50 million and Osisko will make an investment of $28.25 million by way of a non-brokered private placement, for gross proceeds of $78.25 million.
In addition, Osisko plans to exercise 6.25 million warrants at $1.04 later today, bringing the total funding to approximately $84.75 million or approximately £51 million.
Pursuant to the private placement, Orion will acquire 34,013,605 common shares of Dalradian and Osisko will acquire 19,217,687 common shares, each at a price of $1.47 per share.
Dalradian Resources intends to use the proceeds 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.
Dalradian Resources’ significant shareholders include M&G Investment Management Limited, a wholly owned subsidiary of Prudential plc (16.3%, pre-financing), BlackRock, Inc. (12.9%), and Ross J. Beaty (8.4%).
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.
The financing is anticipated to close on or prior to November 30, 2017 and the subscription by each of Orion and Osisko are cross conditional.
Toronto based 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.
photo credit: Dalradian Resources Inc.