Arizona Metals (AMC.V) closes $21 million private offering

04/22/2021

Arizona Metal (AMC.V) announced the closing of a previously announced private placement offering of 10,000,000 special warrants, raising $21,000,000.

Each special warrant shall be deemed to be exercised either on the second business day following the date on which a final receipt is obtained from the Ontario Securities Commission or on at the end of the day on August 23, 2021, whichever comes first.

Each unit will give its owner a share of AMC and half of a warrant. Each full warrant gives the owner the ability to buy a share of Arizona Metals for $3.00 and is exercisable any time over the next 12 months.

The offering’s underwriters received a 6% cash commission and 525,442 non-transferable compensation warrants, exercisable at $2.10 for the next 12 months.

AMC says the main purpose of their financing is to fund 75,000 meters of phase II drilling at their Kay Mine Project. Earlier this month, Arizona Metals announced they were tripling their phase II drilling plans, from 25,000m to 75,000m. As my Equity Guru colleague Greg Nolan noted, “tripling the meterage will also triple the volume of newsflow from the Kay Mine Project.”

The Kay Mine Project is located in Arizona, which the Fraser Institute ranked as the 2nd best mining jurisdiction on their 2020 Investment Attractiveness Index. There have been 60 past-producing mines with a 150km radius of the mine, including the Phelps Dodge’s United Verde Mine, which produced 30Mt at 5% Cu from an open pit, and 4Mt at 10% Cu from underground.

The Kay Mine contains a variety of minerals, including gold, silver, zinc, and copper, with gold and copper making up the majority of the mine’s value.

This private placement is representative of the progress Arizona Metals has been making. In January, 2021, AMC completed a private placement in which they raised $10,000,000 by selling 10,526,315 shares for $0.95. Fast forward a few months, their units are selling for more than double that price. The relatively quick turnaround time of only 12 months on the warrants in this offering also shows that investors expect fairly rapid growth from the company.

Following the news, AMC’s share price did not move significantly.

Full disclosure: Arizona Metals is an Equity Guru marketing client.

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