VANCOUVER — Quarry operator Polaris Minerals (PLS-T, POLMF-O) will eliminate a $20-million bridge loan and add about $5 million to its treasury with a bought-deal financing that closed in January, the company’s CEO Herb Wilson says.
“The repayment will eliminate an interest expense which would have totalled approximately $1.9 million in 2009,” Wilson said in a statement.
Led by GMP Securities, underwriters agreed to buy about 15.6 million units at $1.60 each for a total of about $25 million. Each unit consists of one share and a warrant worth half a common share redeemable at $2.25 for two years.
An overallotment option gives the underwriters the right to buy up to 15% more units for 30 days after the bought deal closed on Jan. 8, bringing in, if fully exercised, another $4 million.
After paying off the loan and adding the rest to its treasury, Polaris will have about $13 million in cash and equivalents.
Polaris operates the Orca quarry, 4 km west of Port McNeill, B. C., and owns a 70% interest in the Richmond terminal, an aggregate facility at the port of Richmond, in 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 partnership between Polaris and the local ‘Namgis First Nation.
For a 12% stake in the quarry project (Polaris owns 78%), the ‘Namgis initially contributed about $6.5 million to its development.
Of that, the ‘Namgis borrowed $6 million from a Polaris subsidiary, a loan it pays back with its share of the mine’s profits.
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 in December, Polaris shares gained 4¢ to $1.74 but the stock had retreated to $1.49 at presstime.
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