Proceeds going to exploration too, estimated reserves to popThis from the bought deal prospectus
The Company intends to use the net proceeds of the Offering for: (i) working capital purposes at MTV as that operation proceeds towards full production, and (ii) exploration and infill drilling in, around and between MTV’s two main orebodies.
Activity or Nature of Expenditure
Estimated Use of Net Proceeds (US$)
(1) Working capital purposes at MTV to proceed towards full production $11,000,000
(2) Exploration and drilling in, around and between MTV’s two main orebodies $965,000
(3)Total Net Proceeds (exclusive of Over-Allotment Option). $11,965,000
Notes:
(1) Assumes Over-Allotment Option is not exercised.
(2) It is anticipated that MTV will operate below its capacity for the remainder of 2021 and into the latter half of 2022 and subject to
the prevailing market price of copper during this period, an amount in excess or below the working capital as stated may be needed to support MTV’s production goals including any incremental cost to support the construction and development of Papomono should delays or complications arise. Papomono is critical to the success of the MTV Project and is approximately 82% complete before mining begins. To date, the construction and development of the inclined block caving mine at its Papomono deposit is currently projected to be within 10.4% of the original budget and within the range of the contingency reserve established for this project. Papomono is forecasted to commence production in January 2022 and reach commercial production in the second half of 2022.
(3) Dr. John Mortimer who is a “qualified person” for the purposes of NI 43-101 is responsible for the exploration and development of the MTV Project program and budget, which were prepared by him or under his supervision.
Until utilized for the above purposes, the Company may invest the net proceeds that it does not immediately require in short-term marketable debt securities, cash balances, certificates of deposit, and other instruments issued by banks or guaranteed by the Government of Canada.
Although the Company intends to expend the net proceeds from the Offering as set forth above, there may be circumstances where, for sound business reasons, a reallocation of funds may be deemed prudent or necessary and may vary materially from that set forth above, as the amounts actually allocated and spent will depend on a number of factors, including the Company’s ability to execute on its business plan. While actual expenditures may differ from the above amounts and allocations, the net proceeds will be used by the Company in furtherance of, and for activities at, the MTV Project. The future impacts of the COVID-19 pandemic on the operations of the Company cannot be accurately predicted as many of the factors are not within the control of the Company. Potential delays in production at the MTV Project could result in additional costs, project delays, cost overruns, and operational restart costs. See "Risk Factors – Risks Related to the Offering – Use of Proceeds".
If the Over-Allotment Option, Unit Warrants or Compensation Warrants are exercised, the Company intends to use the proceeds of such exercise to further fund development at the MTV Project, capital and corporate development expenditures and for general corporate purposes. However, there can be no assurance that all or any of the Unit Warrants or Compensation Warrants will be exercised prior to their expiry.
The Company may require additional financing over and above the Offering in order to meet its longer-term business objectives and there can be no assurances that such financing sources will be available as and when needed. Historically, capital requirements have been primarily funded through revenue from the MTV Project, monetization of the Company’s portfolio investments, issuances of equity securities and debt arrangements. Factors that could affect the availability of financing include the risks related to the ongoing operations of the MTV Project, risks related to COVID-19, the state of international debt and equity markets, the geopolitical environment of Chile, ongoing arbitration between MTV’s shareholders, and investor perceptions and expectations of the copper market. There can be no assurance that such financing will be available in the amount required at any time or for any period or, if available, that it can be obtained on terms satisfactory to the Company. Based on the amount of funding raised, the Company’s plans for its use of proceeds may be postponed, or otherwise revised, as necessary. See “Risk Factors – Liquidity and Capital Resources”.
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