Canada's Luca Mining Completes C$211 Million Financing for Acquisition of Mexican Copper Mine

en.Wedoany.com Reported - On October 14, Canadian mining company Luca Mining announced that it had completed a subscription receipt financing totaling approximately C$211 million to pay part of the cash consideration for the acquisition of the Cozamin underground copper-silver mine in Zacatecas, Mexico. The financing consisted of a C$155 million bought deal private placement and a concurrent private placement of approximately C$56.36 million. The mine acquisition agreement was announced on September 21, with a maximum consideration of US$385 million, and is expected to close upon satisfaction of relevant regulatory approvals and closing conditions.

The bought deal financing involved the issuance of 155 million subscription receipts at C$1 per receipt, with National Bank Financial acting as lead underwriter and sole bookrunner, Scotia Capital acting as joint lead manager, and several other financial institutions participating as underwriters. Goldgroup Mining subscribed for approximately 101.1 million of the receipts and entered into an investor rights agreement with Luca Mining, under which it may participate in future equity financings and nominate two directors, subject to maintaining a specified ownership percentage.

The concurrent private placement was subscribed to by Wheaton Precious Metals and Taurus Mining Finance Fund No. 3, which subscribed for 35,227,250 and 21,136,350 subscription receipts, respectively. Taurus had also previously committed to provide a US$75 million senior secured loan for the acquisition transaction, which forms part of a US$125 million acquisition credit facility and is expected to close concurrently with the mine acquisition.

The proceeds from both financings, net of certain underwriting fees, have been deposited into an escrow account established with Computershare Trust Company of Canada. Under the subscription receipt agreement, upon satisfaction of the conditions relating to the closing of the acquisition, the funds will be released to the company, and each receipt will convert into one common share without any additional payment. The initial deadline for release of funds is February 28, 2027; if the acquisition is not completed due to regulatory approvals, it may be extended up to two times, by one month each time, in accordance with the terms. If the conditions are ultimately not satisfied, the escrowed funds and interest thereon will be returned to subscription receipt holders on a pro rata basis.

The Cozamin mine involved in this acquisition is currently held by Capstone Copper and has approximately 20 years of continuous production history. Under the previously announced transaction agreement, Luca Mining will pay US$275 million in cash and US$15 million in shares, and arrange US$35 million in deferred consideration and up to US$60 million in contingent payments. Luca Mining plans to re-verify mineral resource and reserve data after completing the acquisition and to formulate an updated mine plan.