Defense Metals " or the " Company
Defense Metals Announces Convertible Bridge
Financing
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE
UNITED STATES
/
VANCOUVER, BC
,
Aug. 28, 2024
/CNW/
- Defense Metals Corp.
("
Defense Metals
" or the
"
Company
";(TSXV: DEFN) (OTCQB: DFMTF) (FSE: 35D) is pleased to announce a proposed non-
brokered bridge financing of secured convertible notes (the "
Notes
") for minimum gross proceeds of
CAD$2,500,000
and maximum gross proceeds of up to
CAD$4,000,000
(the "
Offering
"). The
Company will not proceed with its previously announced private placement of units most recently
disclosed in the Company's news release dated
August 6, 2024
.
The Notes will bear interest from the date of issuance at the rate of ten percent (10%) per annum,
payable quarterly in common shares of the Company ("
Common Shares
") at a price per share
equal to the applicable 20-day volume weighted average price of the Common Shares on the TSX
Venture Exchange (the "
TSXV
"), or such other price determined in accordance with the policies of
the TSXV. The Notes will mature on the date that is 12 months after the date of issuance. At any
time up to seven days prior to a Mandatory Conversion Event (as defined below), investors may
elect to convert the principal amount of the Notes into Common Shares at a deemed price per share
of
$0.125
(the "
Conversion Price
").
The Notes will automatically convert into Common Shares upon the occurrence of certain events
(each, a "
Mandatory Conversion Event
"), including the completion by the Company of a new
issuance of equity as part of a minimum
CAD$4,000,000
financing from third party sources
(excluding conversion of the Notes), completion of a sale of all or substantially all of the Common
Shares or assets of the Company, or completion of a merger or other corporate transaction
coincident with a minimum
CAD$4,000,000
fundraise from third party capital (excluding conversion of
the Notes). Upon the occurrence of a Mandatory Conversion Event, the principal amount of the
Notes will automatically convert into Common Shares at a fifteen percent (15%) discount to the
applicable price of the offering implied by the Mandatory Conversion Event, provided that if such
conversion price would be less than the Conversion Price there will be no mandatory conversion.
The Notes will be issued on a private placement basis to eligible accredited investors. , including
lead orders from RCF Opportunities Fund II L.P. ("
RCF
") and
Guy de Selliers
, Defense Metals'
Executive Chairman. RCF has indicated that it intends to subscribe for Notes in the principal amount
of
CAD$500,000
, and
Guy de Selliers
has indicated that he intends to subscribe for Notes in the
principal amount of
CAD$1,000,000
. In connection with their investments, each of RCF and Mr. de
Selliers are expected to enter into a separate investor rights agreements, pursuant to which each
will receive certain board observer rights, cashflow reporting rights and rights to participate in future
financings of the Company.
The Notes will be secured against all personal property of the Company and a first ranking security
interest against the Company's mining claims in respect of the Wicheeda REE Project. All note
holders will rank pari passu among themselves.
The Company intends to use the proceeds of the Offering for completion of the pre-feasibility study
for the Wicheeda REE Project and general corporate and working capital purposes. The Notes and
any underlying Common Shares will be subject to a four-month hold period from the date of issuance
of the Notes as set out in National Instrument 45-102 –
Resale of Securities
.
The Offering is expected to complete in
September 2024
. Closing of the Offering is subject to a
number of conditions, including receipt of all necessary corporate and regulatory approvals, including
the TSXV. The Offering is subject to minimum subscriptions in the amount of
CAD$2,500,000
.
As described above, Mr.
Guy de Selliers
, the Company's Executive Chair, intends to subscribe for
CAD$1,000,000
of Notes in the Offering. Other members of the Company's Board or management
team may participate in the Offering including subscriptions from related parties of the Company as
defined in Multilateral Instrument 61-101
Protection of Minority Security Holders in Special
Transactions
("
MI 61-101
"). The participation of management in the Offering is exempt from formal
valuation and minority shareholder approval requirements pursuant to exemptions contained in
sections 5.5(a) and 5.7(1)(a) of MI 61-101.
Investors that are interested in participating in the Offering should contact the Company's Senior
Vice President, Corporate Development & Interim CFO,
Alex Heath
at
Participation in the Offering is limited to "accredited investors" (as defined under applicable
securities laws) and may be subject to a minimum subscription amount and total investments not to
exceed
CAD$4,000,000
.
This news release does not constitute an offer to sell or the solicitation of any offer to buy, nor
shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful. The Notes and the Common Shares which may be issued on exercise thereof
have not been and will not be registered under the United States Securities Act of 1933, as
amended (the "
U.S. Securities Act
"), or any U.S. state securities laws, and may not be offered or
sold in
the United States
, or to or for the account or benefit of any U.S. person or any person in
the
United States
, absent registration or an applicable exemption from the registration requirements of
the U.S. Securities Act and applicable U.S. state securities laws. "U.S. person" and "United
States" have the respective meanings ascribed to them in Regulation S under the U.S. Securities
Act.
About Defense Metals Corp. and its Wicheeda Rare Earth Element Project
Defense Metals Corp. is focused on the development of its 100% owned, 8,301-hectare (~20,534-
acre) Wicheeda REE Project that is located on the traditional territory of the McLeod Lake Indian
Band in
British Columbia, Canada
.
The Wicheeda REE Project, approximately 80 kilometres (~50 miles) northeast of the city of
Prince
George
, is readily accessible by a paved highway and all-weather gravel roads and is close to
infrastructure, including hydro power transmission lines and gas pipelines. The nearby Canadian
National Railway and major highways allow easy access to the port facilities at
Prince Rupert
, the
closest major North American port to
Asia
.
Defense Metals is a proud member of Discovery Group. For more information please visit:
www.discoverygroup.ca
.
For further information, please visit
www.defensemetals.com
or contact:
Alex Heath
Senior Vice President, Corporate Development & Interim CFO
Tel: +1 604-354-2491
Email:
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 Offering,
completion thereof, receipt of TSXV and other regulatory approvals for the Offering and the use of
proceeds therefrom. 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 and metallurgical results, risks related to the inherent uncertainty of exploration and
development and cost estimates, the potential for unexpected costs and expenses and those other
risks filed under the Company's profile on SEDAR+ (
www.sedarplus.ca
). 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 or obtain 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,
metallurgical, engineering and pricing assumptions, decrease in the price of rare earth elements, the
impact of viruses and diseases on the Company's ability to operate, restriction on labour and
international travel and supply chains, loss of key employees, consultants, officers or directors,
increase in costs, delayed 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.
SOURCE
Defense Metals Corp.
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CO: Defense Metals Corp.
CNW 19:43e 28-AUG-24