Alaska Silver Corp. is moving ahead with a U.S. initial public offering of 11,904,762 units, each made up of one subordinate voting share and a warrant exercisable for one share, according to an amended registration statement filed on Monday.
The filing says that the public offering price will be $0.84 per unit, which is the same as the company’s most recent TSX Venture Exchange close in U.S. dollars.
It also says that the warrant exercise price will be $1.26 with a three year term.
The shares and warrants will be separate right away after they are issued, and the company does not plan to list the warrants.
Cantor Fitzgerald is the only bookrunner on a firm commitment deal. The company also gave the underwriter the option to buy up to 1,785,714 more units within 30 days to make up for any overages.
At the assumed price, the offering would bring in about $10 million in gross income.
Alaska Silver thinks they will make about $8.6 million after paying for underwriting and other costs. If the overallotment option is fully used, they will make $9.9 million.
About $4.2 million would go to exploration, and 6% of the total proceeds would go to paying off part of a promissory note.
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The company also plans to use about $1.32 million to pay back a loan from a shareholder that was made in March. The rest of the money would be used for working capital.
The company says it wants to list its subordinate voting shares on the OTC market in the US, but it will not apply to list the warrants on any national exchange.
The TSX Venture Exchange in Canada will still trade the shares under the symbol WAM.
Alaska Silver is trying to move forward with its Illinois Creek district in western Alaska, and this offer is part of that effort.
Based on an April 2024 estimate that was made public in the prospectus under U.S. mining disclosure rules, the company’s Waterpump Creek target has an inferred resource of 74.9 million silver equivalent ounces with an average grade of 980 grams per metric ton.
Management says that the focus of exploration in 2024 will be on targets near Waterpump Creek and Illinois Creek.
Alaska Silver is still losing money and doesn’t have much cash. Its auditor raised serious doubts about the company’s ability to stay in business.
The company lost a total of $7.28 million in 2024 and $10.07 million in 2023, and it says it will need more money to keep running.
The prospectus says that the deal will be available in the US and, thanks to a listed issuer financing exemption, in Canadian provinces other than Quebec.
Cantor Fitzgerald Canada will be in charge of sales in Canada, and the U.S. broker dealer will be in charge of sales in the U.S. The underwriter’s duties are subject to normal conditions.
Pricing and timing may change until the registration is declared valid.
The company’s assumed price per unit is just a placeholder for calculations, and the warrants would be immediately exercisable if the deal goes through as planned.
The push comes after other recent offerings, like Klarna’s debut on Wall Street, which shows that the market is starting to pick up again.
