Magma Silver closes $5 million private placement

Magma Silver Corp. (TSXV: MGMA) (OTCQB: MAGMF) completed a non-brokered private placement raising $5 million through the issuance of 33,333,332 units priced at $0.15 each, according to a company statement.

Each unit includes one common share and half of one warrant. The warrants allow holders to purchase additional shares at $0.25 per share within 36 months of closing.

Eric Sprott, through 2176423 Ontario Ltd., purchased 6,666,667 units for $1 million. This acquisition gives Sprott ownership of approximately 9.5% of outstanding common shares on a non-diluted basis and 13.6% on a partially-diluted basis assuming warrant exercise.

The company plans to use proceeds for exploration at its Niñobamba silver-gold project in Peru, working capital and general corporate purposes. Magma paid $294,022 in finder's fees and issued 1,928,138 finder warrants exercisable at $0.25 per share for 36 months.

Directors, officers and insiders purchased 100,067 units for $15,010. The securities are subject to a four-month-and-one-day statutory hold period in Canada.

Separately, Magma's board approved 3,525,000 stock options for directors, officers, consultants and employees. The options are exercisable at $0.25 per share for five years, vesting in four equal tranches every three months starting three months from the grant date.

The Vancouver-based company focuses on precious metal mining projects, with its primary asset being the Niñobamba project in Peru.

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