Dilution Watch: San Lorenzo doubled its raise to C$80 million in one afternoon, with no warrant. Defense Metals' unit count and proceeds do not match

Junior resource companies on the TSX Venture and CSE announced or closed about C$94 million of equity financings between October 14 and October 16, by our arithmetic, plus a US$16.4 million convertible debenture. We read the releases. The pattern of the last three weeks held: the biggest, highest priced deal came with no warrant, and the cheap paper came with warrants for buyers, brokers or both.

Company	Size	Price	Warrant	Notable
San Lorenzo Gold (TSXV: SLG)	up to C$80.0M	C$5.30	None	Upsized the same day; C$50M under LIFE
ATERRA Metals (CSE: ATC)	C$8.36M, closed	C$0.06	None for buyers	6.67M broker warrants
Defense Metals (TSXV: DEFN)	C$3.65M stated, first tranche	C$0.14	Half, at C$0.21	Unit count implies C$5.46M
Rocky Shore Gold (CSE: RSG)	C$5.21M, all tranches	C$0.15 FT	None	Insiders in final tranche
Atico Mining (TSXV: ATY)	US$16.4M debenture	US$0.22 conversion	None	Trafigura; debt also settled at US$0.1548

San Lorenzo: C$40 million became C$80 million

San Lorenzo Gold announced a best efforts placement of up to 7,547,200 shares at C$5.30, or up to C$40,000,160, led by SCP Resource Finance. Later the same day it upsized the deal to up to 15,094,400 shares for up to C$80,000,320, with National Bank Financial joining SCP as co-lead agent.

There is no warrant. Up to 9,433,900 shares, or C$49,999,670, are sold under the listed issuer financing exemption and are "expected to be immediately freely tradeable." The other 5,660,500 shares may carry a four month hold. The agents earn 6.0% in cash, cut to 3.0% on the first C$5 million from the company's president's list. If the full C$80 million sells, that is about C$4.65 million to C$4.8 million in cash fees, by our arithmetic.

The use of proceeds also changed. The first release itemised exploration drilling, technical studies and option payments at the Salvadora project. The upsized release says only "exploration at the Salvadora Project and for general corporate and working capital purposes." Closing is set for on or about November 10.

ATERRA closed at the top

ATERRA Metals closed the LIFE offering we flagged on Wednesday at the full C$8,355,000, at C$0.06 a share. The release does not give a share count. By our arithmetic it is 139.25 million new shares, and the release says LIFE shares "are not subject to resale restrictions." Buyers got no warrant. The agents, led by Research Capital, received C$410,167.90 in cash, about 4.9% of the money raised by our arithmetic, plus 6,669,465 broker warrants exercisable at C$0.06 for two years.

Defense Metals: the arithmetic gap

Defense Metals closed a first tranche of its placement and says it raised "approximately C$3,647,877." The same paragraph says it issued 38,994,395 units at C$0.14. By our arithmetic, 38,994,395 units at C$0.14 come to about C$5.46 million, roughly C$1.8 million more than the stated proceeds. The release does not explain the difference.

Each unit carries half a warrant at C$0.21 for 36 months. Of the units, 28,927,143 went out under the LIFE exemption, free of a securities law hold for Canadian residents, though the release says a four month exchange hold applies to certain purchasers. Insiders bought about C$540,011, which the company treats as a related party transaction exempt from valuation and minority approval. Finders received C$99,484 in cash and 710,599 warrants at C$0.14. A second tranche is expected in the coming week.

Rocky Shore: flow-through, no warrant

Rocky Shore Gold closed the final tranche of its upsized non-brokered flow-through placement: in total 34,702,504 shares at C$0.15 for C$5,205,375.60. Buyers got no warrant. Finders got cash (the release does not say how much) and 682,170 warrants at C$0.15 to April 15, 2028. Insiders took 270,000 shares in the final tranche.

Atico: one lender, two prices

Atico Mining closed a secured convertible debenture with a face value of US$16.4 million, issued to an affiliate of Trafigura. The consideration was about US$12.48 million of new money and about US$3.52 million of existing Trafigura loan rolled in. It converts at US$0.22, which the release calls "a premium of 40%" to the 20 day VWAP to September 28. Interest is 7.0% in cash or 10.0% in shares, and it matures in five years and a day. The money repays Atico's 12.0% subordinated debenture held by Dundee Corporation.

In the same release, Atico issued 16,149,870 shares at a deemed price of about US$0.1548 to settle US$2.5 million of the Trafigura credit agreement. By our arithmetic, that settlement price is about 30% below the conversion price on the new debenture. Adviser Ventum Financial earned about 4.13%: US$328,000 in cash and 1,589,147 shares at US$0.22. Trafigura was also the buyer in the Osisko Gold stake we covered on Wednesday.

Why it matters

San Lorenzo raised the most at the highest price and gave no warrant, the same pattern as Scottie, Stardust and Kirkland Lake last week. Under 15 cents, warrants came back, for buyers at Defense and for brokers at ATERRA. LIFE is now the default route: by our arithmetic, up to about 177 million shares and units from San Lorenzo, ATERRA and Defense can trade from closing. And headline proceeds need checking against the share count, as Defense's release shows.

Sources: company news releases for San Lorenzo Gold (October 16), San Lorenzo Gold upsize (October 16), ATERRA Metals, Defense Metals, Rocky Shore Gold and Atico Mining.