Viceroy Resources (TSE) has agreed to sell 3.3 million special warrants to a group of underwriters at $8.65 each. The financing deal is subject to completion of a proposed merger with Loki Gold (TSE) and Baja Gold (TSE).
The brokers also hold an option (expiring May 28) to buy an additional 700,000 special warrants at the same price.
The special warrants will convert, at no additional cost, into one common share of Viceroy.
Proceeds will be held in escrow pending completion of the merger with Baja and Loki. Terms of the merger effectively convert 3.3 shares of Baja or 2.3 shares of Loki into one share of Viceroy.
The merger is expected to be completed by the end of May.
Viceroy plans to add the $27.2 million in net proceeds (or $33 million if the option is exercised) to its working capital for use in the merged company’s exploration programs.
A portion of the funds will be applied to development of the Brewery Creek heap-leach gold project in the Yukon.
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