Nov. 7, 2016 - Tinka Resources Limited ("Tinka" or the "Company") (TSXV: TK) (OTCPK: TKRFF) is pleased to announce that it has closed the first tranche (the "First Tranche") of the previously announced "best efforts" private placement offering of common shares of the Company (the "Shares") which was subsequently upsized for gross proceeds of up to C$11 million (the "Offering"). Under the First Tranche, the Company issued 44,673,250 Shares at an issue price of C$0.20 per share (the "Issue Price") for gross proceeds of C$8,934,650.
The second tranche of the Offering for additional proceeds of up to C$2,065,350 is expected to close on or about November 15, 2016, pursuant to the exercise of pre-existing participation rights by certain other existing shareholders of Tinka (the "Second Tranche").
The Company plans to use the net proceeds from the Offering to fund exploration expenditures at the Company's Ayawilca Project in Peru, as well as for other corporate purposes and general working capital.
Dr. Graham Carman, President and CEO of Tinka states: "We are pleased to close the first tranche of the private placement financing having received strong interest from quality institutional investors such as lead investor JPMorgan Asset Management (UK) Ltd. I wish to also thank the Sentient Group for their continued support of the Company, along with several other existing shareholders."
"The funds raised will enable the Company to execute its exploration objectives in the short to medium term, by drilling 10,000 to 15,000 metres in the upcoming drill campaign at the Ayawilca property in Peru. This drill program will focus on testing the extents of the high grade zinc and tin deposits already discovered at the property, as well as drill testing high priority targets lying in close proximity to our existing resources which have never before been drilled. We look forward to an exciting year ahead."
Participation by Insiders of the Company in the Offering is considered a "related party transaction" pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the Insiders' participation in the Offering in reliance of sections 5.5(b) and 5.7(a) of MI 61-101.
As part of the First Tranche, Sentient Global Resources Fund IV, LP ("Sentient IV"), an Insider of the Company, has exercised its pre-existing participation rights in respect of the Offering. Pursuant to the First Tranche, Sentient IV purchased 11,146,920 Shares under the Offering for gross proceeds of C$2,229,384, resulting in Sentient IV owning an aggregate of 43,291,143 common shares of the Company following the closing of the First Tranche or approximately 22.3% of the Company's basic shares outstanding, and approximately 21.8% fully diluted. In addition, certain directors of the Company participated in the Offering and purchased an aggregate of 300,000 Shares under the Offering for aggregate gross proceeds to the Company of C$60,000.
The Offering was carried out by GMP Securities L.P. as sole agent (the "Agent"). As consideration for its participation in the Offering, the Company paid a cash commission of C$362,566 and issued 1,812,829 broker warrants to the Agent. Each such broker warrant will entitle the Agent to purchase one common share of the Company at the Issue Price for a period of 24 months following the closing of the Offering. The Agent was not paid a commission and did not receive any broker warrants in respect of Shares sold to certain investors including Sentient and those purchasing under the Company's president's list. An additional broker fee of C$6,000 cash commission and 30,000 broker warrants was paid to an arm's length finder.
All securities issued pursuant to the Offering on the date hereof are subject to a four-month and one day hold period under applicable securities laws in Canada expiring on March 8, 2017.
This press release is not an offer or a solicitation of an offer of securities for sale in the United States. The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.
About Tinka Resources Limited
Tinka is an exploration and development company with projects in Peru. Tinka's focus is on its 100%-owned Ayawilca Property in the highly mineralized zinc-lead-silver belt of central Peru, 200 kilometres north of Lima and 40 kilometres from Peru's largest historic zinc mine at Cerro de Pasco. Ayawilca has two separate Inferred Mineral Resource Zones of 18.8 Mt at 8.2% Zinc Eq, and 5.4 Mt at 0.89% Tin Eq, both open for expansion (news release of May 25, 2016). The Colquipucro silver deposit, located 2km north of the Zinc Zone, has Indicated Mineral Resources of 2.9 Mt at 112g/t Ag for 10.4 Moz Ag and Inferred Mineral Resources of 2.2 Mt at 105g/t Ag for 7.5 Moz Ag in 'higher-grade lenses' within a lower-grade resource envelope of 7.4 Mt at 60g/t Ag for 14.3 Moz Ag (Indicated) and 8.5 Mt at 48g/t Ag for 13.2 Moz Ag (Inferred) (news release of Feb' 26, 2015). Dr. Graham Carman, Tinka's President and CEO is a Qualified Person as defined in National Instrument 43-101 and has reviewed and approved the scientific and technical disclosure contained in this press release.
Source: Tinka Resources
