Defense Metals Corp. Comments on Recent Third-Party Promotional Activity Materials pursuant to OTC Markets Request
News Release - Vancouver, British Columbia – October 6, 2022: Defense Metals Corp. (“Defense Metals” or the “Company”) (TSX-V:DEFN / OTCQB:DFMTF / FSE:35D) has received a request by the OTC Markets Group to comment on recent promotional activity related to the Company’s common shares traded on the OTC Markets.
On October 3, 2022, the Company became aware that Resource Stock Digest produced and disseminated a corporate profile published without the knowledge or consent of the Company. The Company was not aware of these materials prior to receiving copies from OTC Markets. Neither the Company nor its officers were involved, directly or indirectly, in the creation, distribution, dissemination or payment for the promotional materials, including through any third-party service provider.
The materials appear to provide an overview of the Company’s business and technical results that were previously publicly disclosed and filed under the Company’s profile on SEDAR at www.sedar.com. The materials are based upon information made available by the Company, including the Company’s news releases and investor presentations. The Company does not believe that the materials have had an effect on the trading activity in the Company’s common shares. The Company had no editorial control over the content or the materials that profile the Company. The Company has reviewed the materials and while the materials may contain some speculative or promotional content it does not consider the statements made in the materials to be materially false or misleading.
The Company has been advised by OTC Markets that OTC Markets takes the position that the newsletter e-mail profiling the Company contains some promotional content and may encourage investors to purchase its shares. The Company wishes to caution readers that some of the content in the newsletter e-mails profiling the Company are speculative in nature. For more complete and specific information regarding the Company, its prospects, and the risks associated with those prospects, readers should consult the Company’s public filings on SEDAR, its website, and other reliable sources. The Company encourages investors to contact their investment advisors prior to making any investment.
Upon inquiry of Company management and to the best of its knowledge, none of the Company’s officers, directors or greater than 10% shareholders, or any third-party service providers, have (i) directly or indirectly been involved in the creation of, distribution of, or payment for the materials related to the Company or its common shares or (ii) sold or purchased any of the Company’s securities in the past 90 days.
Over the last year, the Company has engaged third-party providers for investor relations, public relations, marketing, advertising and other related activities: Bluesky Corporate Communications Ltd. (Todd Hanas), Digitonic Limited and S&A Caspian LLC. In addition, the Company hired Resource Stock Digest to conduct interviews of the Company and provide banner ads on its website (but the Company did not hire them to disseminate the recent newsletter article that was noted by the OTC Markets nor did the Company have knowledge of it).
OTC Markets has further requested that the Company state whether, at any point, it has issued any shares or convertible instruments allowing conversion to equity securities at prices constituting a discount to the current market rate at the time of the issuance. From incorporation on October 5, 2016 to date, there have been numerous instances where the Company issued equity securities at prices which constituted a discount to the market rate at the time of the issuance. All such issuances were made in compliance with the pricing policies of the TSX Venture Exchange. Further information about the Company and its previous financings and filings can be found on the Company’s SEDAR profile at www.sedar.com.
About the Wicheeda REE Property
The 100% owned 4,244-hectare Wicheeda REE Property, located approximately 80 km northeast of the city of Prince George, British Columbia, is readily accessible by all-weather gravel roads and is near infrastructure, including power transmission lines, the CN railway, and major highways.
The Wicheeda REE Project yielded a robust 2021 preliminary economic assessment technical report (PEA) that demonstrated an after-tax net present value (NPV@8%) of $517 million, and 18% IRR1. A unique advantage of the Wicheeda REE Project is the production of a saleable high-grade flotationconcentrate. The PEA contemplates a 1.8 Mtpa (million tonnes per year) mill throughput open pit mining operation with 1.75:1 (waste:mill feed) strip ratio over a 19 year mine (project) life producing and average of 25,423 tonnes REO annually. A Phase 1 initial pit strip ratio of 0.63:1 (waste:mill feed) would yield rapid access to higher grade surface mineralization in year 1 and payback of $440 million initial capital within 5 years.
Qualified Person
The scientific and technical information contained in this news release as it relates to the Wicheeda REE Project has been reviewed and approved by Kristopher J. Raffle, P.Geo. (BC) Principal and Consultant of APEX Geoscience Ltd. of Edmonton, AB, a director of Defense Metals and a “Qualified Person” as defined in NI 43-101.
About Defense Metals Corp.
Defense Metals Corp. is a mineral exploration and development company focused on the acquisition, exploration and development of mineral deposits containing metals and elements commonly used in the electric power market, defense industry, national security sector and in the production of green energy technologies, such as, rare earths magnets used in wind turbines and in permanent magnet motors for electric vehicles. Defense Metals owns 100% of the Wicheeda Rare Earth Element Property located near Prince George, British Columbia, Canada. Defense Metals Corp. trades in Canada under the symbol “DEFN” on the TSX Venture Exchange, in the United States, under “DFMTF” on the OTCQB and in Germany on the Frankfurt Exchange under “35D”.
1 Independent Preliminary Economic Assessment for the Wicheeda Rare Earth Element Project, British Columbia, Canada, dated January 6, 2022, with an effective date of November 7, 2021, and prepared by SRK Consulting (Canada) Inc. is filed under Defense Metals Corp.’s Issuer Profile on SEDAR (www.sedar.com).
For further information, please contact:
Todd Hanas, Bluesky Corporate Communications Ltd.
Vice President, Investor Relations Tel: (778) 994 8072 Email: [email protected]
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Cautionary Statement Regarding “Forward-Looking” Information
This news release contains “forward‐looking information or statements” within the meaning of applicable securities laws, which may include, without limitation, statements relating to the effect of the materials published by Resource Stock Digest, the technical, financial and business prospects of the Company, its project and other matters. All statements in this news release, other than statements of historical facts, that address events or developments that the Company expects to occur, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the price of rare earth elements, the anticipated costs and expenditures, the ability to achieve its goals, that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed and on reasonable terms. Such forward-looking information reflects the Company’s views with respect to future events and is subject to risks, uncertainties and assumptions, including the risks and uncertainties relating to the interpretation of exploration results, risks related to the inherent uncertainty of exploration and cost estimates, the potential for unexpected costs and expenses and those other risks filed under the Company’s profile on SEDAR at www.sedar.com. While such estimates and assumptions are considered reasonable by the management of the Company, they are inherently subject to significant business, economic, competitive and regulatory uncertainties and risks. Factors that could cause actual results to differ materially from those in forward looking statements include, but are not limited to, continued availability of capital and financing and general economic, market or business conditions, adverse weather and climate conditions, failure to maintain or obtain all necessary government permits, approvals and authorizations, failure to maintain community acceptance (including First Nations), risks relating to unanticipated operational difficulties (including failure of equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of personnel, materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters), risks relating to inaccurate geological and engineering assumptions, decrease in the price of rare earth elements, the impact of Covid-19 or other viruses and diseases on the Company’s ability to operate, an inability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to, the effects of COVID-19 on the price of commodities, capital market conditions, restriction on labour and international travel and supply chains, loss of key employees, consultants, or directors, increase in costs, delayed drilling results, litigation, and failure of counterparties to perform their contractual obligations. The Company does not undertake to update forward‐looking statements or forward‐looking information, except as required by law.