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In a notable development, Defense Metals Corp. has announced the successful closure of its private placement, which accumulated a substantial gross of C$16,153,334. This funding will significantly assist the company in advancing its strategic initiatives related to the critical Wicheeda Rare Earth Element Project.
The financing was achieved through a combination of a brokered offering and a non-brokered offering, showcasing strong investor confidence and interest in the company’s future prospects.
Table of Contents:
Details of the private placement
Under the terms of the brokered offering, Defense Metals raised C$11,500,200 by issuing 38,334,000 units, each priced at C$0.30. The offering saw the complete exercise of the agents’ option to increase the size by approximately 15%, indicating strong market demand for the company’s units.
Non-brokered offering contributions
Additionally, the non-brokered offering contributed C$4,653,134 through the distribution of 15,510,446 units. In the near future, the company anticipates completing a second tranche of the non-brokered offering, potentially raising an additional C$570,000.
The units sold during the offerings were issued on a prospectus-exempt basis in accordance with the listed issuer financing exemption outlined in National Instrument 45-106. Each unit comprises one Class A common share and half of a warrant, with each full warrant allowing the holder to purchase an additional share at C$0.45 until October 31.
Future plans and project advancements
Mark Tory, the CEO of Defense Metals, expressed gratitude towards the investors and financial partners, stating, “I am extremely pleased with the level of support in relation to the Offering. We are now in a solid financial position to move forward with starting the Bankable Feasibility Study soon.”
Funds raised from this placement are earmarked for several critical activities, including optimizing the flow sheet developed in the pre-feasibility study released in the past, conducting pilot plant test work, and initiating energy and transmission studies. Additionally, the company aims to commence a feasibility study for the Wicheeda project in the near future.
Compensation and insider participation
Paradigm Capital Inc. served as the lead agent for the brokered offering and received a commission of C$805,014 along with 2,683,380 compensation options, each exercisable for a share at $0.30 until October 31. Furthermore, insiders participated in the non-brokered offering, contributing around C$670,300. This insider participation is categorized as a related party transaction under Multilateral Instrument 61-101.
Regulatory considerations and next steps
It is important to note that the securities from this offering have not been registered under the U.S. Securities Act and are not available for resale in the United States or to U.S. persons unless an exemption applies. The completion of the offering is subject to final approval from the TSX Venture Exchange.
The company aims to utilize the net proceeds for operating costs and general corporate purposes, ensuring steady progress towards its project goals. The proactive steps taken by Defense Metals signify a robust approach to securing necessary funding, which is vital for the advancement of the Wicheeda project.
For more detailed information, individuals are encouraged to visit the official Defense Metals website or contact their corporate office directly.
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