Vancouver — Sprott Molybdenum Participation (MLY-T) closed a highly successful initial public offering (IPO) to raise gross proceeds of $189 million on the sale of 37.8 million units at $5.00 apiece.
The fully subscribed IPO saw the agents fully exercise the 5% overallotment option.
Units were composed of a common share plus half a warrant with each full warrant exercisable at $7.50 until April 16, 2009. Warrants trade on the TSX under the ticker mly.w-t.
Sprott Molybdenum Participation was launched as a holding company to invest in molybdenum exploration and development companies. Its mandate also allows the purchase, sale and trade of the physical metal or equivalents.
With strong market interest in the hot junior molybdenum market, many investors scrambled to get a piece of the IPO as a means to “play” a larger basket of companies in addition to commercial forms of the metal.
Sprott Molybdenum will be managed by fund company Sprott Asset Management, which recently purchased 3,976,000 shares of the participation company at $4.90 per share, giving it just under 10% ownership.
In early April, primary moly producer Blue Pearl Mining (BLE-T, BLEFF-O) sold $36 million worth of shares (3 million shares at $12.00 apiece) to Sprott in a private placement.
Shares of Sprott Molybdenum closed at $5.83 apiece on its first trading day with over 4.6 million shares changing hands.
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