PRESS RELEASE Kiruna on
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN
The Board of Directors in
”Reopening of the Viscaria mine in Kiruna has from the start already good conditions due to its geographical position and the economic benefits and the lower risk that a so called brown-field project entails. The project has taken big steps in recent months with a stronger organization and recruited expertise. The reopening of the Viscaria mine will contribute locally as well as globally, with sustainably produced high-quality copper to the modern electrified society”, says
The Rights Issue in brief
- A person registered on the record date on
7 January 2021 as a shareholder in Copperstone has pre-emption right to subscribe for new shares in the Rights Issue of approximately MSEK 160, before deduction of issue costs, whereby two (2) existing shares entitle to subscription of one (1) new share (i.e. subscription ratio 1:2) at a subscription price ofSEK 0.50 per new share. - The subscription period will take place from and including 11 January up to and including
25 January 2021 . - Copperstone has obtained subscription undertakings in an aggregate amount of approximately MSEK 81.7 corresponding to approximately 50.9 per cent of the Rights Issue with and without the support of subscription rights. This includes undertakings with or without subscription rights from management and Board members of approximately MSEK 19.0 in total, corresponding to approximately 11.8 per cent of the Rights Issue.
- The Company has in connection with the Rights Issue entered into an agreement regarding an interest-free bridge loan, from the Company’s Chairman of the Board,
Jörgen Olsson , via JOHECO of approximately MSEK 10.3 (which is included in the just mentioned MSEK 19.0), that will be set-off against shares in the Rights Issue, firstly within the Rights Issue or, secondly, (given that the EGM gives its approval), at a very high subscription rate, by the means of a directed share issue by set-off (corresponding to an over-allotment option). - The Rights Issue is intended to, primarily, finance the project development towards a reopening of the Viscaria mine, as well as to prepay the additional purchase price regarding the Viscaria acquisition, which the Company has announced separately in a press release that has been announced today in connection with the present press release.
Background and motives
Copperstone is a Swedish exploration company formed 2006. During 2019, the Company acquired Viscaria deposit in Kiruna and accordingly, the Company’s strategy was revised. The goal is to become a modern and responsible producing mining company through the reopening of the Viscaria mine. The deposit’s high level of copper and the geographical location provides for extremely good prerequisites to become an important supplier of qualitative and responsible produced copper to customers who are driving the global change towards an electrified society. In addition to the Viscaria mine, Copperstone has several Exploitation Concessions and Exploration Permits in Arvidsjaur (Eva, Svartliden, Granliden) and Smedjebacken (Tvistbogruvan). Copperstone is accordingly represented in the three largest mining districts in
Copperstone sees good opportunities to restart the Viscaria mine and estimates that up to 25,000 tonnes of copper per year may be extracted, which would make the Viscaria mine one of the largest copper producers in
The Rights Issue is intended to finance the project development towards a restart of the
Benefits with the Viscaria project
Brown-field project in good location
The Viscaria mine was earlier in use between 1983 –1996, owned by LKAB and Outokumpu OYJ. At that time, the Viscaria mine produced 12.5 Mt of ore at 2.3 per cent copper. The mine was closed 1996/1997 when the copper price was at a level of
Great deposit with continued great potential
After the closing of the
Significant underlying market
The demand for copper has increased significantly during the last 25 years. The demand is expected to increase by approximately 40 per cent in total by 2040, according to
Assessment of financing and yield potential reasoning
The reopening of the Viscaria mine entails a total investment need of approximately MSEK 1,500, according to the Company’s previous and present assessment. According to the Company’s financial assumptions, based on industry generic assumptions in combination with the Company´s mineral resource base, the Company´s goal is that Viscaria with the current copper price (approximately
Strengthened management and Board of Directors
During 2020, the management team has been significantly strengthened with highly experienced people from the mining sector with former positions within Boliden, LKAB and Kaunis Iron such as
Use of proceeds from the Rights Issue including bridge loan
In the event that the Rights Issue is fully subscribed, the Company will receive approximately MSEK 160 before deductions for costs related to the Rights Issue, which are expected to amount to approximately MSEK 7. The net proceeds from the Rights Issue are thus estimated to amount to approximately MSEK 153. The Company has entered into an agreement regarding a fee and interest free bridge loan from the Company's Chairman of the Board
Copperstone intends to use the proceeds from the Rights Issue to secure the Company's working capital needs for the coming 18 – 24 months and are intended to be distributed for the following purposes, arranged according to the estimated distribution of the net proceeds.
- Exploration drilling (approximately 30 per cent)
- Other working capital needs* (approximately 30 per cent)
- Prepayment of additional purchase price to Sunstone** (approximately 17 per cent)
- Environmental permit process (approximately 13 per cent)
- Feasibility study (approximately 10 per cent)
* Other working capital needs refers to, among other things, expenses for ongoing business development, development work and personnel costs.
** The additional purchase price (consisting of cash and new shares) corresponds to a long-term liability according to IFRS in Copperstones balance sheet as of
Terms and conditions for the Rights Issue
A person that, on the record date of
The subscription price amounts to
Upon full subscription of the Rights Issue, the Company’s share capital will increase by a maximum of
Subscription rights not exercised during the subscription period becomes void and lose their value. Trading in subscription rights is estimated to take place on Nasdaq First North Growth Market from
Allotment will be adjusted to already made subscription undertakings without the support of subscription rights. In the event that the above mentioned bridge loan is utilized by the Company, the bridge loan is intended to be settled by a set-off in connection with the allotment, and as a second alternative (given the approval of the EGM) at a very high subscription rate, by a directed share issue by set-off (corresponding to a so called over-allotment option). In such case, the total amount for the two rights issues may amount to a maximum of approximately MSEK 170. The total dilution, included the over-allotment option, may therefore amount to a maximum of approximately 34.7 per cent.
Complete terms and conditions and instructions for the Rights Issue as well as other information about the Company will be stipulated in the prospectus published prior to the subscription period is initiated, provided that the EGM authorizes the Board of Directors and that the Board of Directors resolve on the Rights Issue.
Received subscription undertakings
Copperstone has received subscription undertakings in total approximately MSEK 81.7, corresponding to approximately 50.9 per cent of the Rights Issue with and without the subscription rights. This is made possible through taking over subscription rights from the Company’s largest shareholder Sunstone, which, in line with the previously communicated strategy, will not subscribe for its share in the Rights Issue. Subscription undertakings with support of subscription rights amount to approximately MSEK 55.8 and subscription undertakings without support of subscription rights amount to approximately MSEK 25.8. Subscription undertakings with and without the support of subscription rights have been received from a number of major shareholders, certain Board of Directors and key personnel as well as a number of external investors. Board of Directors and management refers the Chairman of the Board
Indicative time plan
EGM | |
During | The Board of Directors’ complete rights issue resolution |
Final trading day for the Copperstone share including the right to participate in the Rights Issue | |
First trading day for the Copperstone share excluding the right to receive subscription rights | |
Record day for the right to participate with pre-emption rights in the Rights Issue | |
On or around | Publication of prospectus |
11 – | Subscription period |
11 – | Trading with subscription rights takes place on the Nasdaq First North Growth Market |
Trading with interim shares | |
Estimated date for the publication of the outcome of the Rights Issue |
Extraordinary general meeting
The Company will convene an EGM due to the Rights Issue, proposing an authorization of the rights issue and proposing an approval of an addendum agreement negotiated with the main shareholder Sunstone regarding the additional purchase price for Viscaria mine, which has been published in a separate press release in connection with this press release.
Advisors
Financial advisor to Copperstone in connection with the Rights Issue is
For more information, please contact
Chairman of the board
jorgen.olsson@deciso.se
CEO
michael.mattsson@copperstone.se
info@copperstone.se or www.copperstone.se
This press release contains inside information that
ABOUT COPPERSTONE
IMPORTANT INFORMATION
The information in this press release does not constitute an offer to acquire, subscribe or otherwise trade in shares, subscription rights or other securities in Copperstone. Any invitation to the persons concerned to subscribe for shares in Copperstone will only be made through the prospectus which Copperstone will publish on the Company’s website (www.copperstone.se) on or around
This press release is not a prospectus in the meaning of Regulation (EU) 2017/1129 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. A prospectus, corresponding to an EU Growth Prospectus, will be drawn up by the Company and published on the Company’s website.
This press release does not constitute an offer to, or an invitation to, acquire or subscribe for any shares in Copperstone in any jurisdiction, neither from Copperstone nor from anyone else. This press release may not be announced, published or distributed, directly or indirectly, in or into
No subscription rights, interim shares or shares in Copperstone have been, or will be, registered under the United States Securities Act of 1933 in its current wording (the “Securities Act”) or the securities laws of any state or other jurisdiction in
The securities referred to herein have not been approved or disapproved by the
This press release contains certain forward-looking information that reflects Copperstone’s present view of future events as well as financial and operational development. Words such as “intend”, “assess”, “expect”, “may”, “plan”, “believe”, “estimate” and other expressions entailing indications or predictions of future development or trends, not based on historical facts, constitute forward-looking information. Forward-looking information is inherently associated with both known and unknown risks and uncertainties as it depends on future events and circumstances. Forward-looking information is not a guarantee of future results or development and actual outcomes may differ materially from the statements set forth in the forward-looking information.
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Attachment
- 20201120 Rights issue
UK
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