This article is 5 years old. Images might not display.
The debentures will mature in five years and carry a 7% coupon.
Subject to terms, the debentures will be convertible into about 11.6 million Atico common shares at a strike price of US59.9c (C71.5c). This conversion price represents a premium of 42% to the 20-day volume-weighted average price and a 34% premium to the 10-day VWAP.
Atico incurs a 2% fee if it redeems the debentures within 12-24 months of the expected December 11 closing date.
Atico will use the proceeds to fund exploration and development at the La Plata VMS gold-copper-zinc-silver project in Ecuador.
"While we are forecasting both cash and working capital to increase over the course of 2021, based on our current commodity price forecasts and operating assumptions for the El Roble copper-gold mine in Colombia, there can be timing issues associated with concentrate shipments that can make revenue and cash flow generation blocky," said Laurentian Bank Securities analyst Jacques Wortman.
"Given the importance of maintaining project development and spending requirements to enable the planned release of the La Plata feasibility study by early 2022, we believe that securing this new form of capital was prudent."
Atico shares (TSXV:ATY) last traded at C59c, which capitalises it at $70 million (US$55 million).
