UPDATE 1-Sprott Resource prices C$45 mln Stonegate IPO
Wed Apr 21, 2010 12:44pm EDT
reuters.com
* Proceeds to be used to explore phosphate deposits
* Offering to close on April 28
* Canadian IPOs experiencing increase
TORONTO, April 21 (Reuters) - Sprott Resource Corp (SCP.TO) said on Wednesday its Stonegate Agricom Ltd subsidiary, which hopes to develop phosphate projects in the United States and Peru, was targeting at least C$45 million ($45 million) in an initial public offering within the next week.
Under the offering, which comes at a time when life is returning to the Canadian IPO market, Stonegate will offer 45 million units at C$1 each.
Each unit will consist of one Stonegate common share and half of one common share purchase warrant.
Each warrant will allow the holder to buy one common share of Stonegate at an exercise price of C$1.50 for up to three years following the closing of the offering.
"The corporation intends to use the net proceeds from the offering to fund the recommended exploration programs on the Mantaro project and the Paris Hills project as set out in the Mantaro Technical Report and the Paris Hills Technical Report," Stonegate said in a filing to SEDAR, the Canadian document filing system for companies.
Stonegate hopes the phosphate deposits, Mantaro in Peru and the Paris Hills in Idaho, could help it capitalize on rising fertilizer demand from rich agricultural centers in North and South America.
Under an over-allotment option, the offering could generate C$51.75 million in gross proceeds if exercised in full.
Sprott Resource Corp currently owns about 63.7 million shares, or about 73 percent of Stonegate. It expects to buy a further 12 million units under the offering, which would leave it with 57 percent of issued and outstanding common shares after the offering closes.
Underwriting of the deal is led by GMP Securities and includes BMO Capital Markets (BMO.TO), Canaccord Financial (CF.TO), Wellington West Capital Markets Inc, CIBC World Markets Inc (CM.TO), Dahlman Rose & Co, Global Maxfin Capital Inc, and Toll Cross Securities Inc.
The IPO is set to close on April 28.
Toronto-based Sprott Resource invests directly and indirectly in natural resources, through acquisitions, joint ventures and other investments.
The Canadian IPO market has sprung back to life in the first quarter of the year after almost nearly two years in the doldrums, with investors favoring resource-related issues. (Reporting by Pav Jordan; editing by Rob Wilson) |
