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Defense Metals Corp., a prominent player in the mining sector, has recently announced the successful closure of a dual private placement initiative, collectively valued at an impressive C$16,153,334. This funding, which comprises both a brokered and a non-brokered offering, marks a significant milestone for the company as it gears up for upcoming projects and studies.
Table of Contents:
Details of the funding structure
The brokered offering alone accounted for C$11,500,200, during which the company issued approximately 38,334,000 units at a price of C$0.30 each.
This successful round of fundraising included an increase of about 15% in size due to the full exercise of the option granted to the agents managing the offering.
In parallel, the non-brokered offering generated an additional C$4,653,134, leading to the issuance of 15,510,446 units. Furthermore, the company anticipates finalizing a second tranche of the non-brokered offering, potentially adding up to C$570,000 in proceeds within a few days.
Understanding the units and their components
Each unit sold during these offerings consists of one Class A common share and half of a warrant. The latter allows investors to acquire one additional common share at a price of C$0.45 before the deadline of October 31. Notably, these warrants are designed to accelerate expiration if the company’s shares reach a closing price of $0.90 for ten consecutive trading days.
Management expressions of gratitude and future plans
Mark Tory, the CEO of Defense Metals, expressed his appreciation for the overwhelming support received during this funding drive, acknowledging both new and existing investors. He stated, “We are now in a solid financial position to move forward with starting the Bankable Feasibility Study in the first quarter,” indicating the company’s commitment to advancing its projects.
Utilization of funds
The net proceeds from this funding round will be instrumental in a variety of initiatives. Specifically, they will support ongoing optimization tests related to the flow sheet developed in the company’s pre-feasibility study. Additionally, funds will assist in completing pilot plant testing, conducting energy and transmission studies, and initiating a feasibility study on the Wicheeda project in the near future.
Regulatory and insider participation insights
It’s worth noting that several insiders participated in the non-brokered offering, contributing around C$670,300. This involvement classifies as a related party transaction, adhering to the guidelines set forth in the Multilateral Instrument 61-101, which governs minority shareholder protections. The company is utilizing exemptions due to the transaction’s value being below 25% of its market capitalization.
Importantly, the securities linked to this announcement are not registered under the U.S. Securities Act, and therefore cannot be sold to U.S. persons without proper registration or exemptions.
Future outlook and strategic goals
As Defense Metals embarks on this new chapter, the company aims to leverage these funds not only for immediate project needs but also to ensure robust operational capabilities moving forward. The company is poised to take significant steps towards enhancing its market position, particularly concerning its rare earth element projects.
By integrating the latest technological advancements and conducting comprehensive studies, Defense Metals plans to fortify its strategic initiatives while nurturing its commitment to sustainable practices and community engagement. With a clear roadmap ahead, the company is set to navigate the complexities of the mining sector effectively.
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