Tinka Resources Ltd (TSX-V: TK) has entered into an equity subscription agreement with Nexa Resources S.A. the largest zinc producer in Latin America. Nexa operates several long-life operating mines and smelting operations in Peru and Brazil and under the terms of the agreement, Nexa will subscribe for 40,792,541 common shares of Tinka at a price of C$0.22 per common share for gross proceeds to Tinka of C$8.97M.
Prior to the private placement, Nexa held approximately 9% of the common shares of Tinka. Upon closing of the private placement, Nexa will become a new insider of Tinka, holding 71,343,053 of the outstanding common shares or approximately 18.2% of the company on a non-diluted basis.
Alongside the Nexa deal, Compañia de Minas Buenaventura SAA, an existing insider of the company, has advised that it will exercise its pre-existing participation rights on the same terms and conditions.
Buenaventura will subscribe for 9,770,669 common shares in the private placement at the issue price for additional gross proceeds to Tinka of C$2.15M. Upon closing of the private placement, Buenaventura will hold 75,614,289 common shares of Tinka and will continue to hold approximately 19.3% of the outstanding common shares of the company on a non-diluted basis.
In total, the gross proceeds of the private placement will be C$11.12M. No finder’s fees or commissions are payable on the private placement. Subject to receipt of exchange acceptance, the private placement is expected to close on or about May 31, 2022.
Proceeds of the placement will be used for further exploration, metallurigal and environmental work at Tinka’s Ayawilca project as well as continued early-stage exploration of the Silvia project, and for general corporate purposes.
The President and CEO of Tinka, Dr. Graham Carman, stated: “Tinka is thrilled to welcome Nexa as a strategic investor in the company, joining Buenaventura and Sentient Equity Partners as our major shareholders. Nexa’s strategic investment in Tinka, and the co-investment by Buenaventura, is a strong endorsement of our globally significant Ayawilca zinc project and of Peru as an important long-term mining and investment jurisdiction. Nexa is a dominant player in the zinc business in Latin America, owning three mines and a smelting operation in central Peru near Ayawilca.”
The CEO of Nexa, Mr. Ignacio Rosado, stated: “In line with our strategy and believing on the promising fundamentals for zinc and its important role in the green economy, we are pleased to announce the increase of our equity interest in Tinka. Nexa has a unique position in Peru and Brazil, and we believe the Ayawilca zinc project provides us a further option to grow, complementing our portfolio and allowing Nexa to secure its relevant position in the zinc market, adding value to all our stakeholders.”
For further information please visit: https://www.tinkaresources.com/
