Sierra Madre Gold and Silver (SM.V) is still halted until the shareholders approve the transaction to acquire the La Guitarra mine from First Majestic Silver (AG, FR.TO) but the company is already going ahead with a subscription receipt offering to raise up to C$10M. These subscription receipts will be converted into common shares of the company upon closing the acquisition (so if the acquisition does not close within 120 days after the closing of the offering, the subscribers will get refunded their investment plus the potential interest).
The subscription receipt financing is priced at C$0.65 and will be a straight share deal upon conversion. A bold move by Sierra Madre given the state of this market, but participants are basically getting the same deal as First Majestic is getting as the latter is also getting issued shares at the same price level.
Disclosure: The author has a long position in Sierra Madre Gold andd Silver. Sierra Madre is a sponsor of the website. Please read our disclaimer.
