Mining giant staying for the long run
Brixton Metals (TSX.V: BBB, FSE: 8BX1, WKN: A114WV) will issue new shares in a private placement and hopes to raise gross proceeds of 10 million Canadian dollars (CAD). Commodities giant BHP, which has a stake in Brixtion Metals through its Canadian subsidiary BHP Investments Canada Inc, is keen to maintain its 19.9 percent stake and will therefore also subscribe for just under 20 percent of the new shares.
For Brixton Metals, this is a clear vote of confidence. It shows that the company is on the right track, has attractive projects and is pursuing a strategy for their development that is also fully supported by an industry player of the size of BHP.
The new shares will be issued at a price of $0.15 CAD. Part of the private placement consists of so-called national flow-through units. For them, Brixton Metals will receive a slightly higher consideration of CAD 0.17 per share. Charity flow-through units will also be issued under a charity agreement. Their price is CAD 0.24 per unit and brings Brixton Metals the highest revenue per share.
As is customary in Canada, each unit consists of one common share of the Company and one-half of one warrant to purchase an additional common share. Shareholders can exercise these warrants within two years at a price of CAD 0.23 per new common share. The NFT Units and each Charity FT Unit also consist of one Brixton Metals common share issued as a “flow-through share” within the meaning of the Income Tax Act of Canada and one-half of one warrant. The exercise price for these warrants is also CAD 0.23.
BHP understands its investment in Brixton Metals as a long-term investment.
The new shareholders must hold their shares for at least four months. However, it can be assumed that BHP Investments Canada, as the largest shareholder of the company, will hold its shares long-term, because the wholly owned subsidiary of BHP Group Limited has already announced that the parent company would like to retain its 19.9 percent share in Brixton Metals.
This makes it clear that BHP is not willing to be diluted. Rather, the share already achieved is to be held in any case and not diluted, which indicates that BHP sees its investment in Brixton Metals as a long-term commitment. The other shareholders can also be pleased about this vote of confidence from an absolute industry giant.
The proceeds will be used for general corporate purposes and exploration activities. Currently, Brixton Metals expects the private placement, which is subject to confirmation by the Toronto Stock Exchange, to be completed by November 15, 2023.
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