Rio2 prices shares of offering, private placement
2021-07-21 22:46 ET - News Release
Mr. Alex Black reports
RIO2 PRICES C$25 MILLION MARKETED PUBLIC OFFERING AND US$5 MILLION NON-BROKERED PRIVATE PLACEMENT
Rio2 Ltd. has priced its previously announced marketed public offering of common shares of the company at a price of 65 cents per common share. Additionally, the Company's previously announced non-brokered private placement of Common Shares to Wheaton Precious Metals Corp. ("Wheaton") will also be conducted at a price of $0.65 per Common Share (the "Private Placement").
RIO2 EQUITY OFFERING
Scotiabank, CIBC Capital Markets and Raymond James (collectively, the "Joint Bookrunners"), as joint bookrunners and co-lead underwriters, along with Cantor Fitzgerald Canada Corporation, Sprott Capital Partners LP, and Cormark Securities Inc. (collectively with the Joint Bookrunners, the "Underwriters") will act as the underwriters for the Offering. Pursuant to an underwriting agreement entered into today between the Company and the Underwriters (the "Underwriting Agreement"), the Underwriters have agreed to purchase 38,500,000 Common Shares from the Company for total gross proceeds of approximately $25 million.
The Company has granted the Underwriters an over-allotment option to purchase up to an additional 15% of the Common Shares issued pursuant to the Offering (the "Over-Allotment Option") on the same terms exercisable in whole or in part, at any time and from time to time, up to 30 days from and including the closing date of the Offering.
Not less than US$20 million of the net proceeds of the Offering plus the proceeds of the Private Placement (the "Combined Proceeds") will be used to fund development of the Company's Fenix Gold Project and associated mine and camp infrastructure (which, for greater certainty includes development of related infrastructure by Lince S.A., a wholly owned subsidiary of the Company). The remaining Combined Proceeds is expected to be used for general working capital purposes. Any proceeds from the exercise of the Over-Allotment Option will be added to the Company's working capital.
Pursuant to the terms of the Underwriting Agreement, the Underwriters will be paid a cash commission equal to 6.0% of the gross proceeds of the Offering (including any gross proceeds raised on the exercise of the Over-Allotment Option), subject to a reduction to 4% of the gross proceeds of the Offering in respect of certain institutional subscribers and a reduction to 1% of the gross proceeds of the Offering for subscribers from the Company's presidents list.
The Common Shares are being offered (i) to the public in each of the provinces and territories of Canada, except for Quebec, (ii) in the United States, only to "qualified institutional buyers" (as defined in Rule 144A under the United States Securities Act of 1933, as amended (the "1933 Act")), in a private placement exempt from the registration requirements of the 1933 Act, and (iii) internationally, as permitted.
The Company expects to file an amended and restated preliminary short form prospectus in connection with the Offering today (the "Prospectus"). The Prospectus will remain subject to completion but contains important detailed information about the Company and the proposed Offering. Prospective investors should read the Prospectus and the other documents the Company has filed before making an investment decision. Following filing of the Prospectus, copies may be obtained from the Underwriters via email at equityprospectus@scotiabank.com or by request to the Company. A copy of the Prospectus will also be available under the corporate profile of the Company on SEDAR at www.sedar.com.
The Offering is scheduled to close on or about August 6, 2021 and is subject to customary closing conditions including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the securities regulatory authorities and the TSX Venture Exchange (the "TSXV"). The completion of the Offering is also subject to the completion of the Private Placement (as described below).
RIO2 PRIVATE PLACEMENT
As contemplated by the non-binding term sheet announced by the Company yesterday, under the Private Placement, Wheaton has agreed to purchase 9,792,880 Common Shares from treasury at the price of $0.65 for proceeds of $6,365,372 (approximately the Canadian dollar equivalent of US$5 million). The proceeds from the Private Placement will be used to further fund development of the Fenix Gold Project and associated mine and camp infrastructure (which, for greater certainty includes development of related infrastructure by Lince S.A., a wholly owned subsidiary of the Company).
The Private Placement is scheduled to close on or about August 6, 2021 and is subject to customary closing conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the approval of the TSXV. The completion of the Private Placement is also subject to the concurrent completion of the Offering.
ADVISORS
DLA Piper (Canada) LLP is acting as legal counsel to Rio2 in respect of the Offering and the Private Placement. Borden Ladner Gervais LLP is acting as legal counsel to the Underwriters in respect of the Offering. McCarthy Tetrault LLP is acting as legal counsel to Wheaton in respect of the Private Placement.
About Rio2 Ltd.
Rio2 is a mining company with a focus on development and mining operations with a team that has proven technical skills as well as a successful capital markets track record. Rio2 is focused on taking its Fenix Gold Project in Chile to production in the shortest possible timeframe based on a staged development strategy. In addition to the Fenix Gold Project in development in Chile, Rio2 Limited continues to pursue additional strategic acquisitions where it can deploy its operational excellence and responsible mining practices to build a multi-asset, multi-jurisdiction, precious metals company.
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