Tuesday, 8 May 2012

Celeste to raise $2.52 million in non-brokered financing

Celeste Copper Corp. (CVE:C) reported after markets closed Monday that it plans to undertake a non-brokered private placement as it seeks to raise $2.52 million.

The Calgary, Alberta-based company plans to sell 28 million units, each made up of one share and one half purchase warrant, priced at nine cents.

Each purchase warrant gives the holder a right to buy another common share of Celeste for a price of 12.5 cents for a 30 month period, after the transactions close.

Proceeds from the placement will go toward boosting Celeste’s interest in Cornish Minerals Limited to 25 percent from 19 percent.

Additionally, the company can further increase its stake in Cornish Minerals to either 50 or 60 percent, provided it completes required funding commitments by September 30, 2013.

Liberty Metals & Mining Holdings, a unit of Boston-based Liberty Mutual Insurance, plans to subscribe for up to 23.3 million units. Liberty, which is a control person of Celeste, would hold about 48 percent of the company’s common shares and 85 percent of the outstanding warrants.

Separately, both companies have amended a previous agreement which will now allow Liberty to elect two nominees to Celeste’s board. At the moment, Liberty can only designate one nominee.

Last year, Celeste entered into an earn-in deal to buy a 60 percent equity stake – with the option to up its interest to 100 percent – in Cornish Minerals Ltd which owns 150 square kilometres of tin and copper mineral rights across the Cornish metallogenic province in Cornwall, England.  

Tin is a silvery malleable metallic element that resists corrosion; it is used in many alloys and to coat other metals to prevent corrosion.

Celeste Copper is focused on developing the historical tin project in Cornwall. The company also has copper, gold and silver properties located in Chile’s Cabeza de Vaca mineral district, where it is undertaking an exploration program.

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