Aclara Resources - A New Strategic Investment For Up To US$80Mil In The Chilean Asset, Plus Potentially A Larger Equity Investment
On March 13th, Aclara Resources ("Aclara" or the "Company") (TSX:ARA) announced a strategic investment up to US$80million from CAP S.A. ("CAP"). CAP is "a company with more than 77 years of history and listed in the Chilean Stock Exchange since 1987, is the parent company of the CAP Group, a Chilean conglomerate operating in various industries including iron ore mining (CMP), with mines and industrial operations in the north of the country, as well as steelmaking operations in Concepcion (Huachipato), very close to the Penco Module". Within the news there is also a new Joint-Venture company being formed with CAP and Alcara.
Francois Motte, CFO of Aclara joins me to discuss the four key components of the news release.
- A US$29.1 million capital contribution by CAP into REE Uno, Aclara´s Chilean subsidiary which owns the Penco Module and all of Aclara´s mining concessions in Chile, in exchange for a 20% equity participation in REE Uno.
- A US$29.1 million capital contribution by CAP into REE Uno, Aclara´s Chilean subsidiary which owns the Penco Module and all of Aclara´s mining concessions in Chile, in exchange for a 20% equity participation in REE Uno.
- A three-year option to invest up to 19.9% in Aclara by participating in any private placement or public offering of shares that Aclara may make during the next 36 months, including a residual topup right to maintain pro rata voting rights. Any subscription to such private placement or public offering will be made on the same terms offered by Aclara to other investors.
- The formation of a 50/50 joint venture to develop metals and alloys for the rare earths permanent magnet industry. CAP will invest US$3.0 million in exchange for its 50% of the shares of the newly established joint venture company. Aclara will own the other 50% of the shares.
If you have any follow up questions for Francois regarding the news please email me at Fleck@kereport.com.
