Sprott sets price for molybdenum fund offering
Snapshot: ARU ASX CLL KRY PAX PDN PLE SKV SNO WIN
OTTAWA, April 4 (Reuters) - Sprott Molybdenum Participation Corp. announced prices for its highly anticipated initial public offering on Wednesday, but stocks related to the rare base metal had only a muted reaction following an extended recent rally.
The fund will invest in both miners and molybdenum, which is valued for its strengthening and anti-corrosive properties.
Anticipation of the fund helped fuel a recent rise in stocks linked to molybdenum, as did tight supplies and the expectation of a quota system from China, a major global supplier.
Sprott said the fund will sell 36 million units for C$5 each, raising gross proceeds of C$180 million ($155 million).
Each unit consists of one common share and one-half of one common share purchase warrant. Warrant holders can buy one common share for C$7.50 in a two-year period from the close of the offering, expected on April 16.
A syndicate of agents will get an overallotment option to buy up to 5 percent of the total units sold on closing.
Sprott Asset Management, which previously launched Uranium Participation Corp. (U.TO: Quote, Profile, Research), has acquired 3.9 million common shares of the molybdenum fund, representing a 9.94 percent stake.
After the pricing announcement, shares in Blue Pearl Mining (BLE.TO: Quote, Profile, Research) added 4 Canadian cents to C$13.11 on the Toronto Stock Exchange. Blue Pearl is the world's biggest pure-play, publicly traded molybdenum producer.
Moly Mines (MOL.TO: Quote, Profile, Research), which is developing a molybdenum project in Australia, added 12 Canadian cents, or 3 percent, to C$3.85.
Juniors such as Roca Mines (ROK.V: Quote, Profile, Research) slipped 3 Canadian cents to C$2.85, while Adanac Molybdenum (AUA.V: Quote, Profile, Research) dropped 12 Canadian cents, or 5 percent, to C$2.33.
($1=$1.16 Canadian)
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