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Tinka Resources arranges C$7mln bought deal financing to explore Peru project further

A syndicate of underwriters will buy, on a bought-deal basis,14.6mln units at 48 cents a throw.
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Tinka is a zinc explorer focused in Peru

Tinka Resources Ltd (CVE:TK) is set to bring in C$7mln from a bought deal financing for exploration at the Ayawilca project in Peru, as well as for general working capital.

A syndicate of underwriters will buy, on a bought-deal basis, 14.6mln units at 48 cents a throw.

READ: Tinka Resources releases assay results at Ayawilca zinc project in Peru

Each unit will consist of one share and one-half of a warrant.

The latter will entitle the holder to acquire one company share for 75 cents for 12 months following the closing of the deal.

There is an overallotment option for the underwriters to buy for 30 days a further 2.19mln units at the same price.

If this option is exercised in full, an additional approximate C$1.051mln in gross proceeds will be raised and the total gross proceeds of the offering will be around C$8.059mln.

Concurrent with the offering, Tinka will carry out a non-brokered private placing of up to 12.5mln units for additional gross proceeds of up to C$6mln to certain existing shareholders.

The offering is scheduled to close on or around April 4 this year.

Tinka's flagship property is the 100% owned Ayawilca carbonate replacement deposit (CRD) in the zinc-lead-silver belt of central Peru, 200km northeast of Lima.

The Ayawilca zinc zone inferred mineral resource now consists of 42.7 million tonnes at 6% zinc, 0.2% lead, 17 grams per tonne (g/t) silver and 79 g/t indium, and a tin zone inferred mineral resource of 10.5mln tonnes at 0.63% tin, 0.23% copper and 12 g/t silver.

Positive drill results posted earlier this month showed there was a lot more exploration potential at the project, the company said.

“Other priority targets for this year include extensions of the mineralisation at west, south, and central Ayawilca," Dr Graham Carman, Tinka's president and chief executive had said.

"A new geological interpretation suggests that high-grade, thick zinc mineralisation generally lies near the intersection points of northeast-trending faults and north-south-trending folds in the strata.”

READ: Tinka Resources appoints Benedict McKeown as new non-executive chairman

Tinka plans to drill an additional 25 to 30 step out holes into a range of targets during the first half of 2018, Carman added.

The company’s two key objectives for 2018 are to its exploration drill program targeting additional zinc resources at Ayawilca with 15,000 metres of drilling planned; and advance the project with desktop mining studies and detailed metallurgical tests that will form the basis of a preliminary economic assessment (PEA) planned for the second half of 2018.

"Exact timing of the PEA will depend on the extent to which significant new mineralisation is identified in the first half of 2018,” Carman told investors.

Tinka shares in Toronto are down 3.92% to C$0.49.

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