Azarga Metals Corp (CVE:AZR) has revealed it is getting a boost from London-listed Baker Steel Resources Trust Ltd (LON:BRST) in the form of an additional US$500,000 investment, the junior explorer announced Monday.
The new funds come as part of an April 2019 agreement that saw Baker Steel invest US$3 million into Vancouver-based Azarga via an 8% secured convertible loan.
Azarga said it plans to use the proceeds to advance drilling and exploration at its Unkur copper-silver project in Russia, which currently boasts an inferred resource of 62 million tons at 0.5% copper and 38.6 grams per ton silver. The firm’s goal is to considerably expand the known mineralized envelope at Unkur.
In a statement, Azarga said the two companies have also agreed to amend the terms of the loan, increasing the total amount to US$3.5 million. The conversion price, originally C$0.14, is reduced to C$0.10.
Azarga will issue a batch of non-transferrable warrants to Baker Steel valued at US$500,000 and exercisable at C$0.10 until December 31, 2022. The exercise price of the original 13,490,414 warrants already issued to Baker Steel will also be reduced from C$0.17 to C$0.10.
Baker Steel will own just over 39% of Azarga, or 59 million shares, if and when it converts the principal US$3 million loan at the current conversion price of C$0.14 and exercises all of its 13.5 million warrants.
Following drawdown of the third advance of US$500,000, the UK-listed investment vehicle would beneficially own around 48.6% of the company or nearly 87 million shares.
Azarga recently revealed its widest mineralized intercept to date from Unkur, an intercept of 86 metres grading an average of 0.6% copper and over 57.6 grams per ton silver.
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