Avrupa Minerals Closes Oversubscribed CA$1.25M Private Placement
At very high zinc and copper prices, and with a pretty impressive (60.4m @ 2.25% CuEq) drill result at the Sesmarias target, part of the Alvalade project in Portugal, it was easier for Avrupa Minerals to raise almost a third of their market cap, being CA$1.25M. The Critical Investor does a quick update.
After announcing a strong and potentially game changing drill result (60.4m @ 2.25% CuEq) at Sesmarias on January 25, 2022, followed by a CA$1M private placement on February 8, 2022, Avrupa Minerals Ltd. (AVU:TSX.V; AVPMF:OTC; 8AM:FSE) managed to increase this amount, and raised CA$1.25M on March 2, 2022. As JV partner MATSA (now part of Sandfire Resources) funds exploration at the Sesmarias massive sulfide target, part of their flagship Alvalade project in Portugal, Avrupa will use the proceeds to work on their own, recently acquired Finnish gold- and copper/zinc-focused properties.
Avrupa Minerals raised an oversubscribed total of CA$1,250,000 from the issuance of the 16,666,667 units to fund the acquisition of four projects in Finland, for exploration expenditures on these properties, and for working capital. Each unit is comprised of one common share at CA$0.075, and a full warrant. The warrant is valid for three years expiring February 28, 2025 and is exercisable at $0.125. Finder’s fees of 7.5% in cash and 7.5% in finder’s warrants were paid to eligible parties. All securities are subject to a four-month hold expiring on June 29, 2021.
CEO Paul Kuhn was happy to finally see a full treasury after a long time, and commented, “We are pleased with the continued strong support from our shareholders and from our new investors. With the funding, we expect to advance our new projects in Finland through the exploration licensing process, with the goal of selecting the best areas in each of the reservations for license application. We also expect to acquire and compile existing historic data, and continue with new project exploration work and starting the drill targeting process. We are also excited about the continuation of fully partner-funded drilling and exploration at Sesmarias and the rest of the Alvalade Project, and await guidance from our partner as to how the program will proceed. In addition, Avrupa continues to review further precious and base metal opportunities around Europe.”
It was good to see that MATSA wants to continue the JV at the Alvalade project, right after finally hitting the first long intercept at Sesmarias, but Avrupa is still waiting on guidance from the new MATSA owner Sandfire Resources.
I’m also curious what the Finnish properties could have in store, as it is a prolific area with lots of successful exploration by other companies ongoing. Additional advantage in my view is the increased control Avrupa will have about exploration spending, by paying for this themselves, which will change into full control during Stage 2 of the earn-in, and of course will then be working towards full ownership.
During the private placement, the company also announced a shares-for-debt settlement. The amount accounted for is CA$285k, and is intended to be settled with two insiders of the company, who have deferred salary and fee payments for the past several years, and also funded CA$56k with loans to the company. The proposal involves the issuance of 3.8M shares @ CA$0.075, with no warrants. The remaining amount of debt after this settlement will be settled in cash at a later date.
Regarding ongoing exploration, Avrupa Minerals has completed 17 drill holes now at Sesmarias North, totaling 8,900 m, The company also drilled a 614m scout hole at the Caveira target, which will be reported later during Q1.
According to CEO Kuhn, the drill rig has been moved to another MATSA property in Portugal to complete required work, vis à vis their license commitments, and will drill one to two holes before presumably coming back to Sesmarias. Avrupa is waiting on guidance from MATSA and their new owners on how/when drilling will continue. As a reminder: game changing hole SES21-044 at Sesmarias was part of a fence, drilled at section 350S to the south, as can be seen here on this section:
Regarding holes SES21-041/042/43, these will also be reported later on during Q1.
Regarding the new acquisition in Finland, the company is about to close the transaction with the vendor, and has already actively worked on the data-in-hand for the Kolima reservation to fully identify lands wanted for the exploration license application. Avrupa expects to provide information on that in the coming weeks.
The company plans to do further assessment investigations in order to properly identify the potential lands for exploration licenses in the other three reservations. These applications are not due until later in the year and into 2023.
It is good to see Avrupa Minerals having raised decent cash on their own after a long time of being dependent on JV partner MATSA, which isn’t operating particularly quickly as it uses a cautious approach on exploration, not generating a lot of news flow. This could all change when Avrupa manages to get the new Finland properties permitted for exploration, and with fresh CA$1.25M cash in hand, it is able to set up decent exploration programs which should be able to provide additional and hopefully interesting news during the second half of this year. In the meantime, the company expects to continue drilling at Sesmarias after the present break, and since Avrupa finally hit serious mineralization in their last reported hole, things are looking much more promising in Portugal all of a sudden.
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Please note: the views, opinions, estimates, forecasts or predictions regarding Aztec Minerals’ resource potential are those of the author alone and do not represent views, opinions, estimates, forecasts, or predictions of Aztec Minerals or Aztec Minerals’ management. Aztec Minerals has not in any way endorsed the views, opinions, estimates, forecasts, or predictions provided by the author.
The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high-quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.
The author is not a registered investment advisor, and has a long position in this stock. Avrupa Minerals is a sponsoring company. All facts are to be checked by the reader. For more information go to avrupaminerals.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
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