NGEx Minerals more than doubles private placement to $85M

Due to strong demand, NGEx Minerals (TSXV: NGEX) has opted to more than double its private placement financing from $40 million to $85 million, issuing approximately 13 million common shares at $6.50 each instead of 6.1 million shares.

As indicated in a press release Thursday, NGEx’s largest shareholders, being three entities that comprise the Lundin family trusts, plan to subscribe for up to $40 million of the placement. The company spun out of the Lundin Group in 2019.

The net proceeds will be predominantly used for its Lunahuasi exploration project in San Juan province, Argentina, and Los Helados project in Chile’s Region III as well as the repayment of a US$3 million credit facility.

NGEx is the majority partner and operator for the Los Helados copper-gold project, the main asset of the Lundin spinout. The project is subject to a joint exploration agreement with Nippon Caserones Resources, which is the 49% owner of the Caserones open pit copper-molybdenum mine in Chile.

Lundin Mining recently took a 51% stake in Caserones after signing a US$950 million deal with JX Nippon Mining & Metals. It has the right to increase its interest to 70% by paying another US$350 million.

NGEx’s Los Helados project is located approximately 15 km south of Caserones. It has indicated resources of 2.1 billion tonnes grading 0.38% copper, 0.15 gram gold per tonne and 1.37 gram silver and inferred resources of 827 million tonnes at 0.32% copper, 0.10 gram gold and 1.32 gram silver.

Shares of NGEx gained 4% to $6.69 apiece by noon in Toronto Friday following the upsized private placement. The company has a market capitalization of $1.1 billion.

NGEx shares have remained above $5.83 each since April after a drill program revealed high grades at the Potro Cliffs copper-gold project in northwest Argentina saw shares shoot up by more than 20%.