Exploration Orbite V.S.P.A. Inc. (TSXV:ORT.A), a Montreal-based aluminum industry company, says it has struck a deal to raise up to $50 million in a move that will help it expand its business in Quebec.
Orbite said Wednesday it had entered into an agreement with Mackie Research Capital and underwriters to sell them more than 15.6 million common shares and half-share warrants of the company at C$3.20 each to raise $50 million.
The bought deal is slated to close the week of July 4 and the money raised will be used to convert the company's Cap-Chat pilot plant in eastern Quebec into a commercial producer of alumina, the powdery raw material used to smelt aluminum.
"This financing is expected to permit Orbite to convert its Cap-Chat pilot plant into a commercial facility geared at producing ultra-pure alumina and to pursue other development efforts within its business plan," said Orbite president Richard Boudreault.
"Concluding a $50 million bought-deal financing demonstrates the confidence that the market has in respect of the potential of the company and we are very excited with the future prospects that this offering will bring."
Orbite owns the mining rights on its 6,441-hectare Grande-Vallee property, the site of an aluminous clay deposit located 32 kilometres northeast of Murdochville in the Gaspe region.
It also owns a 28,000 processing mill at Cap Chat and technology to extract alumina from clay.
Orbite shares were halted on the TSX Venture Exchange pending news of the financing.
When trading resumed the stock fell 35 cents to $3.26, a drop of more than 9.7 per cent in trading of four million shares on the junior market.
Investors worried about the stock-dilution effects of the bought deal financing.
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