Mitsubishi Materials Corporation invested 21.3 million in Western Copper and Gold Corporation (TSX: WRN) (NYSE: WRN), in a strategic equity move that will boost the development of the Canadian company’s copper-gold Casino Project in the Yukon.
Western Copper announced the successful completion of the investment which aims to propel the project further forward on Friday. The funding will be directed towards the project’s development and financing of designated research areas. These areas will be identified in collaboration with Mitsubishi Materials, with the ultimate goal of moving the Casino project towards a development phase.
Mitsubishi Materials Corporation purchased 8,091,390 Western Copper shares at $2.63 per share. This acquisition has resulted in Mitsubishi Materials owning approximately 5 per cent of Western Copper’s outstanding common shares.
Rio Tinto’s (NYSE: RIO) Canadian subsidiary, Rio Tinto Canada, also intends to acquire 878,809 shares of Western Copper at $2.63 per share. The proceeds of which will be roughly $2.3 million. This subscription will enable Rio Tinto to sustain its stake of approximately 7.84 per cent in the company. The subscription is projected to be completed on or before May 1, 2023.
“We are pleased to welcome Mitsubishi Materials as a strategic investor in the company,” said Paul West-Sells, president and chief executive officer. “The investment by Mitsubishi Materials is a strong endorsement of the Casino project. We look forward to working with Mitsubishi Materials to advance Casino.”
Ellis Martin Report:Western Copper and Gold:$WRN Mitsubishi invests $21…. https://t.co/rCpS8vT7c4 via @YouTube @RioTinto @MHI_Group @yukongov @InvestYukon @westernCuandAu #copper #gold #mining
— Ellis B Martin (@EllisMartinRprt) April 13, 2023
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Western will stay the sole owner and operator of the project
Western Copper and Gold Corporation is a Canadian mining company that focuses on the exploration and development of copper and gold deposits in North America. The company’s flagship project is the Casino project, a copper-gold mining project located in the Yukon, Canada, in the northwest trending Dawson Range mountains, 300 kilometers northwest of Whitehorse. Western Copper and Gold Corporation also holds several other exploration-stage projects, including the Carmacks copper project in the Yukon and the Mount Anderson gold project in Alaska.
Western Copper and Mitsubishi Materials have also executed an investor rights agreement, outlining the latter’s rights and restrictions. These rights will be in effect until 24 months after the investment completion, or until Mitsubishi Materials’ ownership falls below 3 per cent, whichever comes first.
Mitsubishi Materials will be given the right to appoint a member to the Casino project technical and sustainability committee, as well as the right to appoint at least one director of the company or 17 per cent of the number of directors, should its ownership increase to 12.5 per cent or more.
Furthermore, Mitsubishi Materials will have the right to participate in future equity issuances to maintain its ownership in the company and will be provided with a one-time demand registration right and piggyback registration rights in case its ownership increases to 8.0 per cent.
For two years after the investment completion, Mitsubishi Materials will not sell, transfer, offer or dispose of any shares without first informing the company, and will abstain from voting or vote any shares in favour of each director nominated by the board of directors of the company for election by shareholders. The company has given certain exceptions for Mitsubishi Materials to acquire securities of the company.
Additionally, Mitsubishi Materials will have the right of first negotiation, until two years after the investment completion or until its ownership falls below 3 per cent, to purchase at least its proportionate share of minerals produced from the Casino project.
Finally, the company and Mitsubishi Materials will negotiate in good faith new rights and restrictions related to its share ownership, which will take effect when Mitsubishi Materials’ ownership reaches 12.5 per cent or more, or 18 months after the investment completion, whichever comes earlier.
Shares of Western Copper rose 2.2 per cent and are presently trading at $2.59 on the Toronto Stock Exchange.
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