Pan American Silver (
TSX: PAA,
Forum) and Kootenay Silver (
TSX: V.KTN,
Forum) strengthened their business bond when the company’s announced today that Pan American has exercised its second tranche option to subscribe for additional common shares of Kootenay in order to maintain a 10% ownership interest in Kootenay.
According to the
news release, this announcement was pursuant to Kootenay’s acquisition of Northair Silver and its acquisition of the 2.5% net smelter returns royalty from Coeur Capital, regarding the future production of Kootenay’s La Cigerra project.
As a result of the agreement, Pan American intends to subscribe for 6.8 million additional Kootenay common shares for an aggregate subscription price of $1.55 million.
Net proceeds from the subscription will be used to assist Kootenay’s exploration activities as well as being used for general corporate purposes.
Kootenay President and CEO, James McDonald, commented, “We are delighted with Pan American's vote of confidence in not only our Promontorio Mineral Belt assets, but also the La Cigarra opportunity we have acquired through the business combination with Northair Silver Inc.”
He concluded, “After the closing of the Second Tranche Investment, we will have a strong cash position to advance the La Cigarra project and pursue more potential consolidation and growth opportunities that will be accretive to the Kootenay shareholders.”
Kootenay Silver was in the news recently when
the Vancouver-based company announced the completion of its business combination with Northair Silver.
Shares edged up 1.43% to $0.355 per share.
Currently there are 79.42m outstanding shares with a market cap of $27.80 million.
FULL DISCLOSURE: Kootenay Silver is a Stockhouse Publishing client.