District Metals Announces Closing of $4.75 Million Private Placement Financing
District Metals Announces Closing of $4.75
Million Private Placement Financing
/NOT FOR DISTRIBUTION TO
UNITED STATES
NEWSWIRE SERVICES OR DISSEMINATION IN
THE UNITED STATES
/
VANCOUVER, BC
,
Dec. 30, 2020
/CNW/ -
District Metals Corp.
(TSX-V: DMX) (FRA: DFPP)
;
("District" or the "Company")
is pleased to announce that it has closed its previously announced
brokered private placement financing pursuant to an agency agreement with Haywood Securities
Inc. (the "
Agent
"), raising aggregate gross proceeds of
$4,750,000
(the "
Offering
"). Under the
terms of the Offering, the Company issued a total of 15,833,333 units (the "
Units
") at a price of
$0.30
per Unit (the "
Issue Price
"), including the exercise by the Agent of an option granted by the
Company to sell up to an addition
$250,000
worth of Units.
Garrett Ainsworth
, President & CEO of District, commented: "District Metals is now fully funded for
the upcoming
5,000 m
drill program at our high grade polymetallic Tomtebo Property located in the
Bergslagen Mining District of south-central
Sweden
. Our financing was heavily oversubscribed,
exemplifying the enthusiasm towards the discovery potential at our high priority Tomtebo targets. I
would like to thank our existing shareholders who participated, as well as welcome many new
shareholders, including several institutional investors."
Each Unit consists of one common share in the capital of the Company (a "
Unit Share
") and one-
half of one common share purchase warrant (each whole such purchase warrant, a "
Warrant
").
Each Warrant will entitle the holder thereof to acquire one common share in the capital of the
Company (a "
Warrant Share
") at
$0.42
per Warrant Share for a period of 24 months from the
Closing Date (as hereinafter defined), provided that if, at any time prior to the expiry date of the
Warrants, the volume weighted average trading price of the common shares in the capital of the
Company on the TSX Venture Exchange is equal to or greater than
$0.70
for 10 consecutive trading
days, the Company may, within 15 days of the occurrence of such event, deliver a notice to the
holders of Warrants accelerating the expiry date of the Warrants to the date that is 30 days
following the date of such notice (the "
Accelerated Exercise Period
"). Any unexercised Warrants
shall automatically expire at the end of the Accelerated Exercise Period.
The net proceeds from the Offering will be used for exploration at the Company's Tomtebo project in
Sweden
, and for working capital and general corporate purposes.
In consideration for its services, the Agent received a cash commission of
$255,000
and was issued
850,000 compensation options, with each such compensation option entitling the holder to purchase
one Unit of the Company at a price of
$0.30
per Unit for a period of 24 months from the date of
issuance.
All securities issued and issuable pursuant to the Offering are subject to a statutory hold period and
may not be traded until
May 1, 2021
except as permitted by applicable securities legislation and the
rules and policies of the TSX Venture Exchange.
Certain related parties of the Company participated in the Offering. The issuance of Units to related
parties is considered to be a related party transaction within the meaning of TSX Venture Exchange
Policy 5.9 and Multilateral Instrument 61-101 ("
MI 61-101
"). The Company has relied on the
exemptions from the valuation and minority shareholder approval requirements of MI 61–101 (and
Policy 5.9) as the fair market value of the Units issued to such persons does not exceed 25% of the
Company's market capitalization.
The securities issued pursuant to the Offering 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 applicable U.S.
state securities laws, and may not be offered or sold in
the United States
absent registration or any
applicable exemption from the registration requirements of the U.S. Securities Act and applicable
U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of
an offer to buy securities in
the United States
, nor shall there be any sale of these securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful.
Further to a shareholder rights agreement entered into between the Company and EMX Royalty
Corp. ("
EMX
") in connection with the acquisition of the Tomtebo and Trollberget properties in
June
2020
, EMX has been issued 219,756 common shares in the capital of the Company, which
completes EMX's top-up right to maintain its proportionate shareholding in the Company for no
additional consideration.
Additionally, pursuant to the previously announced services agreement between the Company,
Vector Geological Solutions Inc. (the "
Consultant
"), and
Daniel MacNeil
, as principal of the
Consultant, in connection with the acquisition of the Tomtebo and Trollberget properties in
June
2020
, the Company has issued 33,610 common shares in the capital of the Company to the
Consultant. The Consultant is at arm's length to the Company.
The Company has also granted a total of 1,400,000 stock options to directors, officers, employees
and consultants of the Company, in accordance with the provisions of its stock option plan. Each
stock option is exercisable at
$0.46
per common share (being the closing price of the Company's
common shares on
December 29, 2020
, the grant date). All stock options have a term of five years
and vest on the grant date.
About District Metals Corp.
District Metals Corp. is led by industry professionals with a track record of success in the mining
industry. The Company's mandate is to seek out, explore, and develop prospective mineral
properties through a disciplined science-based approach to create shareholder value and benefit
other stakeholders.
The advanced exploration stage Tomtebo Property, located in the Bergslagen Mining District of
south-central
Sweden
, is the Company's main focus. The Tomtebo Property comprises 5,144 ha,
and is situated between the historic Falun Mine and Boliden's Garpenberg Mine located 25 km to the
northwest and southeast, respectively. Two historic polymetallic mines and numerous polymetallic
showings are located on the Tomtebo Property along an approximate 17 km trend that exhibits
similar geology, structure, alteration and VMS/SedEx style mineralization as other significant mines
within the district. Mineralization that is open at depth and along strike at the historic mines on the
Tomtebo Property has not been followed-up and modern systematic exploration has never been
conducted on the Property.
On Behalf of the Board of Directors
"
Garrett Ainsworth
"
President and Chief Executive Officer
(604) 288-4430
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined
in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy
of this release.
Cautionary Statement Regarding "Forward-Looking" Information.
This news release contains certain statements and information that may be considered "forward-
looking statements" and "forward looking information" within the meaning of applicable securities
laws. In some cases, but not necessarily in all cases, forward-looking statements and forward-
looking information can be identified by the use of forward-looking terminology such as "plans",
"targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned",
"estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations
of such words and phrases or statements that certain actions, events or results "may", "could",
"would", "might", "will" or "will be taken", "occur" or "be achieved" and other similar expressions. In
addition, statements in this news release that are not historical facts are forward looking
statements, including statements or information
concerning the use of proceeds of the Offering
.
These statements and other forward-looking information are based on assumptions and estimates
that the Company believes are appropriate and reasonable in the circumstances, including, without
limitation, assumptions about the
future prices of precious metals; the price of other commodities
such as coal, fuel and electricity; currency exchange rates and interest rates; favourable operating
conditions; political stability; timely receipt of governmental approvals, licences and permits (and
renewals thereof); access to necessary financing; stability of labour markets and market conditions
in general; availability of equipment; the accuracy of mineral resource estimates and preliminary
economic assessments; estimates of costs and expenditures to complete the Company's programs
and goals; and there being no significant disruptions affecting the development and operation of
the project, including due to the COVID-19 pandemic.
There can be no assurance that such statements will prove to be accurate, and actual results and
future events could differ materially from those anticipated in such statements. Important factors
that could cause actual results to differ materially from the Company's expectations include risks
associated with the business of the Company; business and economic conditions in the mining
industry generally; the supply and demand for labour and other project inputs; changes in
commodity prices; changes in interest and currency exchange rates; risks relating to inaccurate
geological and engineering assumptions; risks relating to unanticipated operational difficulties;
failure of equipment or processes to operate in accordance with specifications or expectations;
cost escalations; unavailability of materials and equipment; government action or delays in the
receipt of government approvals; industrial disturbances or other job action; unanticipated events
related to health, safety and environmental matters; risks relating to adverse weather conditions;
political risk and social unrest; changes in general economic conditions or conditions in the
financial markets; and other risk factors as detailed from time to time in the Company's continuous
disclosure documents filed with Canadian securities regulators. The Company does not undertake
to update any forward-looking information, except in accordance with applicable securities laws.
SOURCE
District Metals Corp.
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%SEDAR: 00004264E
For further information:
Garrett Ainsworth, President and Chief Executive Officer, (604) 288-4430
CO: District Metals Corp.
CNW 13:00e 30-DEC-20