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In a significant financial move, Defense Metals Corp. has announced the successful completion of its private placement, amassing a total of C$16,153,334. This funding round, which included both a brokered offering and a non-brokered offering, demonstrates strong investor confidence and positions the company for future growth.
Under the brokered offering, the company generated C$11,500,200 by issuing 38,334,000 units at a price of C$0.30 per unit. This includes the successful execution of an over-allotment option that allowed for a 15% increase in the offering size. Meanwhile, the non-brokered offering raised C$4,653,134 through the issuance of 15,510,446 units.
Details of the Offering
The units sold in this offering were structured as a combination of a common share and a warrant. Each unit comprises one Class A common share and one-half of a warrant. These warrants provide investors the right to purchase additional shares at C$0.45 each until October 31. If the company’s shares reach a trading price of $0.90 for ten consecutive days, the warrants will be subject to an accelerated expiry.
Funding Utilization Plans
With the successful closure of this private placement, Mark Tory, CEO of Defense Metals, expressed optimism about the company’s future. He noted, “We are now in a solid financial position to move forward with starting the Bankable Feasibility Study in the first quarter.” These funds will be primarily used for furthering the Wicheeda project, enabling the company to conduct optimization tests and pilot plant studies.
The net proceeds will also support essential operational costs and broader corporate purposes, helping to lay a strong foundation as the company enters a pivotal phase of development.
Involvement of Financial Agents
Paradigm Capital Inc. played a crucial role as the lead agent and bookrunner for the brokered offering, while EAS Advisors LLC collaborated through Odeon Capital Group LLC. For their efforts, the agents received C$805,014 in cash commissions and were granted 2,683,380 compensation options. Each compensation option allows the purchase of one common share at $0.30 until October 31.
In addition, the company allocated $41,582 in finder’s fees and issued 63,708 compensation options to various arm’s length finders related to the non-brokered offering. Notably, Canadian resident participants in the offering are exempt from any hold period, except for a four-month TSX Venture Exchange hold that will expire after a designated period.
Insider Participation
Insiders of Defense Metals contributed approximately C$670,300 to the non-brokered offering. This transaction is classified as a related party transaction under the Multilateral Instrument 61-101. The company invoked exemptions from the formal valuation and minority shareholder approval requirements, as the participation from insiders remains below 25% of the company’s market capitalization.
It’s important to note that the securities involved in this offering have not been registered under the U.S. Securities Act of 1933. Thus, they cannot be sold within the United States without proper registration or exemption.
Conclusion and Future Outlook
In summary, the recent funding acquisition marks a significant milestone for Defense Metals. The company is now poised to enhance its project development, particularly the Wicheeda Project, while optimizing its operational capabilities. The confidence exhibited by investors in this private placement serves as a testament to the potential of Defense Metals in the rare earth elements market.
For more insights and updates, stakeholders are encouraged to follow Defense Metals Corp. and the progress of its projects as it embarks on this exciting new chapter.
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