OROCO ANNOUNCES CLOSING OF BROKERED PRIVATE PLACEMENT FOR GROSS PROCEEDS OF $6.3M

Rhea-AI Summary

Oroco Resource Corp. has completed a brokered private placement, raising $6.3 million through the sale of 14,051,127 units at $0.45 per unit. Each unit includes one common share and one half of a common share purchase warrant, exercisable at $0.65 for 24 months. The offering was led by Red Cloud Securities Inc. and Canaccord Genuity Corp. Oroco paid a cash commission of $271,636.20 and issued 603,636 broker warrants, and 99,763 advisory warrants. Proceeds will fund the Santo Tomás Project in Mexico, working capital, and general corporate purposes. The units are immediately freely tradeable under Canadian law but are subject to a hold period until October 7, 2024, on the TSXV.

Positive

• Raised $6.3 million through private placement.
• Each unit priced at $0.45, including one common share and one half warrant.
• Warrants exercisable at $0.65 per share for 24 months.
• Proceeds will fund the Santo Tomás Project and other corporate purposes.
• Units immediately freely tradeable under Canadian law.
• Led by reputable agents, Red Cloud Securities Inc. and Canaccord Genuity Corp.

Negative

• Paid $271,636.20 in commissions and issued 603,636 broker warrants.
• Advisory fee of $44,893.43 along with 99,763 advisory warrants issued.
• Shares issued to directors and brokers subject to a hold period until October 7, 2024.
• Offering still subject to final acceptance by the TSX Venture Exchange.
• Securities not registered under the US Securities Act of 1933, restricting US sales.

VANCOUVER, British Columbia, June 07, 2024 (GLOBE NEWSWIRE) -- Oroco Resource Corp. (TSX-V: OCO, OTC: ORRCF) (“Oroco” or the “Company”) is pleased to announce that it has completed its previously announced brokered private placement of 14,051,127 units of the Company (the “Units”) at a price of $0.45 per Unit for aggregate gross proceeds of $6,323,007.15 (the “Offering”), which includes the partial exercise of the Agents’ option. Each Unit is comprised of one common share in the capital of the Company (a “Common Share”) and one half of one Common Share purchase warrant (each whole warrant, a “Warrant”).  Each Warrant entitles the holder to purchase one Common Share at an exercise price of $0.65 for 24 months following the closing date of the Offering.

The Offering was conducted by Red Cloud Securities Inc., acting as lead agent and sole bookrunner, and Canaccord Genuity Corp. (collectively, the “Agents”). In connection with the Offering, the Company paid to the Agents a cash commission of $271,636.20 and issued 603,636 broker warrants (the “Broker Warrants”).  Each Broker Warrant is exercisable into one Common Share of the Company at a price of $0.45 per share for a period of 24 months from the issuance date. Additionally, as consideration for financial advisory services in connection with the Offering, the Company paid the Agents an advisory fee of $44,893.43 and issued 99,763 advisory warrants (the “Advisory Warrants”) to the Agents. Each Advisory Warrant is exercisable into one Common Share on the same terms as the Broker Warrants. 

The Company intends to use the proceeds from the Offering for the advancement of the Santo Tomás Project located in Sinaloa State, Mexico, as well as working capital and other general corporate purposes.

Subject to compliance with applicable regulatory requirements and in accordance with National Instrument 45-106 - Prospectus Exemptions (“NI 45-106”), the Units were issued to purchasers pursuant to the listed issuer financing exemption under Part 5A of NI 45-106. The Common Shares and Warrants issuable pursuant to the sale of Units, and the shares issuable upon exercise of the Warrants, are immediately freely tradeable under applicable Canadian securities legislation. The Broker Warrants, Advisory Warrants, and Common Shares issuable thereon have a statutory hold period expiring on October 7, 2024. Units issued to a director of the Company are subject to a hold period expiring on October 7, 2024, pursuant to the policies of the TSX Venture Exchange (the “TSXV”).  The Offering remains subject to final acceptance of the TSXV.

The securities offered have not, nor will they be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons in the absence of U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”) the Company advises that certain subscribers under the Offering are considered to be a “related party” of the Company. Each subscription by a “related party” of the Company is considered to be a “related party transaction” for purposes of MI 61-101 and TSXV Policy 5.9 - Protection of Minority Security Holders in Special Transactions. The Company is relying on the exemptions from the formal valuation requirements contained in section 5.5(b) of MI 61-101 and the minority shareholder approval requirements contained in section 5.7(1)(a) of MI 61-101, as the Company is not listed on specified markets and the fair market value of the “related party” participation in the Offering does not exceed 25% of the Company’s market capitalization, as determined in accordance with MI 61-101.

ABOUT OROCO

The Company holds a net 85.5% interest in those central concessions (the “Core Concessions”) comprising 1,173 hectares of the Santo Tomas Project located in northwestern Mexico. The Company also holds an 80% interest in an additional 7,861 hectares of mineral concessions surrounding and adjacent to the Core Concessions (for a total Project area of 9,034 hectares, or 22,324 acres). The Project is situated within the Santo Tomas District, which extends up to the Jinchuan Group’s Bahuerachi Project, approximately 14 km to the northeast. The Project hosts significant copper porphyry mineralization defined by prior exploration spanning the period from 1968 to 1994. During that time, the Project area was tested by over 100 diamond and reverse circulation drill holes, totalling approximately 30,000 meters. Commencing in 2021, Oroco conducted a drill program (Phase 1) at Santo Tomas, with a resulting total of 48,481 meters drilled in 76 diamond drill holes. In October of 2023, the Company announced a Preliminary Economic Assessment and Updated Mineral Resource for the North and South Zones of the Santo Tomas Project, identifying Indicated and Inferred resources of 561 Mt @ 0.37% CuEq and 549 Mt @ 0.34% CuEq respectively.

The Project is located within 160 km of the Pacific deep-water port at Topolobampo and is serviced via highway and proximal rail (and parallel corridors of trunk grid power lines and natural gas) through the city of Los Mochis to the northern city of Choix. The property is reached, in part, by a 32 km access road originally built to service Goldcorp’s El Sauzal Mine in Chihuahua State.

Additional information about Oroco Resource Corp. can be found on its website at www.orocoresourcecorp.com and by reviewing its profile on SEDAR at www.sedarplus.com.

For more information please contact:

Mr. Richard Lock, CEO
Oroco Resource Corp.
Tel:  604-688-6200
www.orocoresourcecorp.com

Neither TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Information

This news release includes certain “forward-looking information” and “forward-looking statements” (collectively “forward-looking statements”) within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact included herein, including, without limitation, statements relating to future events or achievements of the Company, and the use of funds from the Offering, are forward-looking statements. There is no assurance that the proceeds of the Offering will be expended as contemplated. Many factors, both known and unknown, could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. Readers should not place undue reliance on the forward-looking statements and information contained in this news release concerning these matters. Oroco does not assume any obligation to update the forward-looking statements should they change, except as required by law.

FAQ

How much did Oroco Resource Corp. raise in the private placement?

Oroco Resource Corp. raised $6.3 million through its private placement.

What is the price per unit in Oroco's private placement?

Each unit in the private placement was priced at $0.45.

What does each unit in Oroco's private placement include?

Each unit includes one common share and one half of a common share purchase warrant.

What is the exercise price and period for the warrants issued by Oroco?

The warrants are exercisable at $0.65 per share for 24 months.

What will Oroco use the proceeds from the private placement for?

The proceeds will fund the Santo Tomás Project, working capital, and general corporate purposes.

Are the units from Oroco's offering freely tradeable?

Yes, the units are immediately freely tradeable under Canadian securities legislation.

Is there a hold period for any of the securities issued in Oroco's offering?

Yes, broker, advisory warrants, and shares issued to directors are subject to a hold period until October 7, 2024.

Who led the brokered private placement for Oroco?

The private placement was led by Red Cloud Securities Inc. and Canaccord Genuity Corp.

Is Oroco's offering subject to any regulatory approval?

Yes, the offering is subject to final acceptance by the TSX Venture Exchange.

Are the securities from Oroco's offering registered under the US Securities Act of 1933?

No, the securities are not registered under the US Securities Act of 1933, restricting US sales.