Vancouver – Quarry operator Polaris Minerals (PLS-T) will eliminate a $20 million bridge loan and add about $5 million to its treasury with a bought deal financing, the company’s CEO Herb Wilson says in a statement.
“The repayment will eliminate an interest expense which would have totalled approximately $1.9 million in 2009,” Wilson notes.
Led by GMP Securities, underwriters agreed to buy about 15.6 million units at $1.60 each for total of about $25 million. Each unit consists of one common share and a warrant worth one half a common share redeemable at $2.25 for two years following an expected Jan. 8 closing.
An overallotment option also gives the underwriters the right to buy up to 15% more units for 30 days after the bought deal closes, bringing in, if fully exercised, about $4 million more.
After paying off the loan and adding the rest to its treasury, Polaris will have about $13 million in cash and cash equivalents.
Polaris operates the Orca quarry, 4 km west of Port McNeill, BC, and owns a 70% interest in the Richmond terminal, an aggregate port facility in Richmond, San Francisco.
The quarry, which began production in 2007, is permitted to churn out about 6 million tonnes of sand and gravel.
It is a unique 78-12% partnership between Polaris and the local ‘Namgis First Nations.
For its 12% stake in the quarry project, the ‘Namgis initially contributed about $6.5 million to project.
Of that the ‘Namgis borrowed $6 million from a Polaris subsidiary, a loan it pays back with a share of profits from the mine.
In addition to the partnership, about half of the quarry’s employees come from the ‘Namgis and Kwakiutl First Nations.
On news of the financing Polaris’ share price gained 4¢ to close at $1.74.
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