Eloro closes CAD 9.8m Bought Deal Financing
Shortly after Eloro Resources filed an updated technical report on the Iska Iska silver-tin polymetallic project in the Bolivian Potosi Department, the company announced that it closed a CAD 9.775m bought deal financing. With an immaculate 100% track record of holes drilled that intersected reportable mineralization, we reiterate our Buy rating for Eloro Resources and increase our fully diluted price target to CAD 16.90 from CAD 15.30 per share, derived from an in-situ valuation of Iska Iska’s Santa Barbara Breccia Pipe.
Eloro Resources has closed a bought deal financing of 3,007,710 units of the company at a price of CAD 3.25 per unit. Each unit consists of one share and one-half of a warrant of the company. Each warrant entitles the holder to acquire an additional common share at a price of CAD 4.75 for a period of 24 months following the closing of the offering.
Gross proceeds of the bought deal underwritten by Cormark Securities are CAD 9.775m. The net proceeds of CAD 8.939m will be mainly used to carry out more drilling in the Santa Barbara area where after the recent discovery of extensive high-grade mineralization Eloro needs to fully define the mineralized zone for an estimation of an inaugural mineral resource for Iska Iska. In addition, recent drilling has indicated the potential for a significant tin porphyry in the Porco area which could become a second major discovery at Iska Iska, in our view.
After completing the remaining 4,628 metres of the current drilling program, most probably in June, Eloro says it will commence the recommended phase I work program set out in the Technical Report with an estimated completion date of October 2022e. The activities contemplated by this phase 1 program include 15,000 metres of additional drilling and the completion of a maiden mineral resource estimate for Iska Iska.
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