In what is possibly the worst look possible, NorZinc Ltd (TSX: NZC) this morning announced that it has successfully completed a rights offering, raising $9.5 million through the financing. The company then, in the same news release, announced that ongoing drilling was halted yesterday with just one hole being completed on the current program.
The rights offering, conducting at $0.065 per common share, saw a total of 146,028,424 common shares issued, heavily diluting current shareholders. 86,662,428 shares were said to be issued under the basic subscription privileges, while 10,999,124 were issued under additional privileges. The final 48,366,872 common shares sold under the offering were a result of a standby commitment with RCFVI CAD LLC, the firms largest shareholder.
It should be noted that it did not actually receive $7,169,647 in funds of the total figure raised. Instead, RCFVI set off a debt figure in this amount related to an outstanding US$5.25 million bridge loan.
The transaction increased the firms outstanding share figure dramatically, with the figure rising from 390,050,921 to that of 536,079,345, an increase of 37.4%.
Finally, NorZinc concluded this mornings release by stating that drilling had been halted as of yesterday at its flagship high grade zinc-lead-silver project, the Prairie Creek Mine, located in the Northwest Territories. The company had provided an update on the drill program just three days ago, identifying that one hole had been completed under the 1,300 metre program.
Blaming winter weather conditions and the “logistical and manpower constraints” of the operation due to COVID-19, the company halted drilling operations at 11am yesterday. The company also indicated that the drill will remain on the drill pad until spring, when drilling is expected to resume. Just one hole was completed under the program before it was halted.
NorZinc Ltd last traded at $0.08 on the TSX.
Information for this briefing was found via Sedar and NorZinc Ltd. The author has no securities or affiliations related to these organizations. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
