Goldgroup Mining raises US$122M, issues 33.38M units
The US$3.65 units carry half a warrant each, and Goldgroup has not assigned the proceeds to specific projects.
Mara Quinlan
Goldgroup Mining Inc. CVEGORO NYSEAMERICANGORO FRA55G said Friday it closed a non-brokered private placement for US$121,845,490, selling 33,382,326 units at US$3.65 each. The new shares equal 24.6 per cent of the 135.7 million common shares Goldgroup reported outstanding as of Sept. 9, before any intervening change to the share count.
Shares fell 0.57 per cent to US$3.50 on NYSE American NYSEAMERICANGORO at 4 p.m. EDT Friday. The closing announcement was issued at 4:34 p.m. EDT, after that trading session ended.
Goldgroup first proposed up to US$75 million on Sept. 8, then raised the ceiling to US$125 million on Sept. 14 as demand grew. Friday's gross proceeds exceeded the original target by more than 60 per cent, though they came in below the revised ceiling.
The company says net proceeds will support working capital and general corporate purposes, including its mining and development assets and possible strategic investments or acquisitions. It has not allocated the cash to specific projects, and may hold it in cash equivalents or short-term investments pending deployment.
The US$3.65 unit price was 3.7 per cent above Thursday's U.S. share close of US$3.52, shown on Friday's 4 p.m. EDT NYSEAMERICANGORO quote. Each unit also includes half a common-share purchase warrant, so subscribers received an additional right alongside the share.
The placement therefore created 16,691,163 whole warrants. Each lets its holder buy one additional common share at US$5.10 until March 25, 2028; full exercise would bring Goldgroup about US$85.1 million in further gross proceeds and create that many more shares. Warrant exercise is uncertain.
Goldgroup paid eligible finders about US$4.22 million in cash commissions, according to its closing release. The sale was non-brokered, and the TSX Venture Exchange gave conditional approval to close it. Final exchange approval depends on the company completing its remaining filings.
"We intend to deploy this capital to support production growth, project advancement and carefully selected external opportunities," chief executive Javier Reyes said in the release.
Goldgroup operates the Don David and Cerro Prieto gold mines in Mexico. Its San Francisco project in Sonora is being advanced toward a possible restart, while the Back Forty project in Michigan is moving through permitting and feasibility, according to the company.
The September financing was announced as the company sought capital across those four assets, but Friday's release did not set a spending timetable for any of them. Goldgroup also said it might reallocate proceeds in response to opportunities or market conditions, and no acquisition or investment is assured.
The Canadian statutory hold period on the new shares and warrants ends Jan. 26, 2027, four months and one day after the closing.
