Morocco-focused Atlantic Tin has finalised paperwork for a $5-milllion fundraising with UK-based royalty and streaming company Apex Royalties.

The proceeds will be used to further develop the company’s Achmmach tin project, including to progress a definitive feasibility study (DFS) for completion during the first quarter of next year.

The fundraise comprises a $1-million equity placing that will result in Atlantic issuing about 7.5-million fully paid ordinary shares at a price of A$0.20 apiece, and $4-million royalty financing in return for a 1.2% gross revenue royalty on future production from the Achmmach, Samine and Bou El Jaj licences.

As a condition of the fundraising with Apex, Atlantic’s largest shareholder, Pala Investments, has agreed to convert A$11.4-million of its shareholder loan into equity at the issue price. Pala will, therefore, be issued about 57-million fully paid ordinary shares upon completion of the debt conversation.

Pala’s shareholding in the company will increase to 72.74%.

Additionally, Pala wants to convert its remaining outstanding debt as of November 8, totalling A$500 000, into equity as soon as permitted.  

Atlantic nonexecutive chairperson Stephen Gill says this capital raising and royalty funding allows Atlantic to complete the ongoing DFS for Achmmach with limited dilution to shareholders.

“It will also fund the start of exploration activities on the recently acquired Samine licence to investigate the numerous outcropping occurrences of tin mineralisation along strike from Achmmach.”

Together with Pala’s shareholder loan conversion, Atlantic has simplified its capital structure ahead of the construction financing process to be undertaken in the first half of next year following the completion of the DFS.

Apex CEO James Kelley comments that the Achmmach tin project is a standout development in tin – a commodity with exceptionally strong demand-supply dynamics. The recently completed Samine acquisition further enhances and derisks the project, reducing capital expenditure and adding significant resource upside for Atlantic in Morocco.