Salazar Resources (SRL-V) climbed 18% on news that diversified miner Lundin Mining (LUN-T) is acquiring a 15.4% stake in the company by buying over 80% of Salazar’s $3-million private placement, consisting of 6 million units priced at 50¢ apiece.
The financing was announced on Jan. 30 and closed four days later, pushing Salazar’s shares up to 75¢ before settling at 66¢.
Each unit comprises a share and half a non-transferable warrant, with a full warrant allowing the holder to buy another share within two years at 65¢ apiece.
The company gave Lundin a non-dilutive right so it can maintain its 15.4% ownership by taking part in Salazar’s future financing.
Salazar’s other key shareholder, Silvercorp Metals (SVM-T), also took part in the placement to maintain its pro-rata interest at 10.7%.
“Salazar management believes that the new interest and investment by Lundin, as well as Silvercorp’s continued investment and support is a testament to the quality and potential of the El Domo project,” the company’s chief executive Fredy Salazar said in a statement.
In mid-January the company updated resources at its volcanogenic massive sulphide El Domo deposit on the Curipamba project in Ecuador. Indicated resources stand at 5.53 million tonnes grading 2.4% copper, 2.5% zinc, 0.3% lead, 2.8 grams gold and 48.4 grams silver per tonne for 292.6 million lbs. copper, 304.8 million lbs. zinc, 36.5 million lbs. lead, 498, 000 gold and 8.6 million oz. silver.
It has another 1.46 million tonnes grading 1.9% copper, 2.8% zinc, 0.3% lead, 2.4 grams gold and 52.2 grams silver in inferred.
Since the cut-off date for the resource estimate, the company’s CEO says 7,000 metres have been drilled, which continue to show intriguing results.
The company says proceeds from the private placement will go towards funding exploration, mainly at El Domo.
Lundin has substantial copper, zinc, nickel and lead assets in Portugal, Sweden, Spain and Ireland. It owns 24% of the Tenke Fungurume copper-cobalt mine in the Democratic Republic of the Congo, with Freeport-McMoRan Copper & Gold (FCX-N) holding 56% and state-owned miner Gécamines the rest.
Lundin is currently expanding the Neves-Corvo copper-zinc underground mine in Portugal.