Sprott investment sends Discovery’s stock higher
Discovery Metals (TSXV: DSV) on Monday arranged a non-brokered private placement to raise up to C$25 million through the issuance of up to 45.5 million units at a price of C$0.55 per unit.
Each unit comprises one common share of Discovery Metals and one half of one common share purchase warrant, with each full warrant exercisable at C$0.77 for a period of two years after the issue date.
Billionaire mining investor Eric Sprott has agreed to invest C$10 million in the private placement on the acquisition of 18.18 million units. Assuming the placement is fully subscribed, this investment will result in Sprott holding approximately 24.4% of Discovery Metals’ issued and outstanding common shares.
Proceeds of the placement will be used to fund exploration at the company’s Cordero silver project and its Coahuila projects in Mexico.
“The strong investment interest in Discovery is a clear reflection of the exposure and leverage that our Cordero project provides to a rising silver price,” Discovery Metals president and CEO Taj Singh said in a press release.
“Upon completion of this financing, Discovery will have over $40 million of cash on its balance sheet – this positions Discovery as one of the best-financed silver exploration companies in the industry and provides the firepower to aggressively advance Cordero and to accelerate our exploration efforts on the surrounding regional property package,” he added.
Located in the Chihuahua-Zacatecas silver-gold belt in northern Mexico, the Cordero project has an estimated resource of 407.8 million oz silver and 1.27 million oz gold in the indicated category.
Shares of Discovery Metals jumped 22.2% at midday Monday to a three-month high. The Toronto-based miner has a market capitalization of C$139.6 million.