Standard Tolling (TON.V) has announced it received approval of the TSX Venture Exchange to close the deal to acquire an existing processing facility which was announced several months ago. As it took a bit longer than expected to close the agreement we are extremely delighted to see all i’s have been dotted and t’s been crossed. Standard Tolling will acquire the plant by issuing 2.5 million shares and a promissory note to pay $250,000 within two years of closing. Additionally, it will assume $1.325M in existing debt and it intends to pay down a part of the existing debt to make it subordinate to future ore financing debt.
The company will also close a private placement raising almost $2.7M which is quite extraordinary for a micro-cap company with a market capitalization of half the amount which was raised. Yes, this will cause the dilution factor to be relatively high (as there will also be a full warrant valid for five years), but this solution is better than doing nothing for another year. It’s indeed painful to swallow a huge dilution but it will definitely make the company stronger going forward. We would expect the plant to be ready in Q2 2015 where after commissioning could start.
We will meet with Standard Tolling’s management team soon and will provide a more detailed outlook for the company’s plans for 2015. There’s one thing you can be sure of, the year will be packed with news and progress.
> Click here to read the press release
Disclosure: The author holds a long position in Standard Tolling and participated in the most recent private placement. Standard Tolling is a sponsor of the website. Please see our disclaimer for current positions.
