Electric Metals (USA) Limited Announces Final Closing of Quail Bend Financing
ELECTRIC METALS (USA) LIMITED ANNOUNCES FINAL CLOSING OF QUAIL BEND FINANCING
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWS WIRES
• EML obtains shareholder approval for creation of Quail Bend as “control person”.
• EML closes final tranche of Quail Bend financing for aggregate gross proceeds of $5,000,000.
• Steve Durbin appointed to the Board of Directors.
Toronto, Ontario, October 10, 2023: Electric Metals (USA) Limited (“EML” or the “Company”) (TSXV: EML)
(OTCQB: EMUSF), further to its press release s of August 29, 20 23 and August 22, 2023 is pleased to
announce it has closed the second and final tranche (the “ Final Tranche”) of its previously announced
non-brokered financing (the “Offering”). Pursuant to the Final Tranche closing, the Company issued a total
of 14,255,319 units (the “Units”) at a price of $0.235 per Unit for gross proceeds of $ 3,349,999.97. Each
Unit consisted of one common share in the capital of the Company (each, a “Common Share”) and one
share purchase warrant (each, a “Warrant”) with each Warrant exercisable to acquire one additional
Common Share at an exercise price of $0.35 for a period of 24 months fr om the date of issuance of the
warrant, which may be cashlessly exercised subject to certain conditions.
The Fi nal Tranche closing was completed in connection with a binding letter of intent between the
Company and Quail Bend LLC (“Quail Bend”) dated May 12, 2023, as amended August 21, 2023 (the “LOI”)
pursuant to which Quail Bend, or an affiliate thereof, agreed to acquire up to 21,276,596 Units. Following
an initial closing of 5,319,149 Units on June 16, 2023 and a further closing of an additional 1,702,128 Units
on August 28, 2023 , the Company and Quail Bend have now completed the purchase and sale of an
aggregate of 21,276,596 Units for aggregate gross proceeds of $5,000,000.
On closing of the Final Tranche, Quail Bend became a "Control Person" within the meaning of such term
under applicable TSX Venture Exchange (“ TSXV”) policies and applicable securities laws . The Company
called a meeting of shareholders which was held on October 5, 2023 at which a resolution approving the
creation of Quail Bend and its affiliates as a new Control Person of the Company was passed by the
disinterested shareholders of the Company.
A minimum of 80.0% of the funds raised from proceeds of the Offering from Quail Bend will be used on
development of the Company's Emily Manganese Project in Minnesota, USA including metallurgical and
battery test work, process design, an updated NI 43 -101 resource report, and advancing environmental
and other technical studies. The Offering is subject to the receipt of the final approval of the TSXV.
As a result of the Final Tranche closing, the Company has granted to Quail Bend certain investor rights
pursuant to an investor rights agreement (the “ IRA”) which it will retain so long as it controls 10.0% or
more of the issued and outstanding Common Shares and which includes the following: the Company has
increased the number of directors to six and has appointed Steve Durbin as a director of the Company as
Quail Bend’s nominee; Quail Bend will have the right to participate in any future public or private equity
financing by the Company to maintain its pro rata ownership interest in EML, and to potentially increase
its ownership interest, to the extent there is additional room in the relevant financing; and each of Gary
Lewis and Henry Sandri entered into lockup agreements pursuant to which they agree not to sell any
securities of EML they own or control, except in certain circumstances and agreed not to compete with
the Company in any manganese project in North America for a period of 12 months. In accordance with
the terms of the LOI and the IRA, Mr. Durbin has been awarded 1,500,000 stock options of the company,
effective on the second business day after the date of public disclosure of the closing of the Offering and
related matters, at an exercise price that is the greater of (i) C$0.25, (ii) the lowest price permitted by the
TSXV, and (iii) the lowest price permitted by the Company’s stock option plan , which options are
exercisable for a period of 5 years from the date of grant. 1,000,000 of the Options shall vest and be
exercisable immediately upon the grant thereof and 500,000 of the Options shall vest and be exercisable
in the event that the volume weighted average price of the common shares of the Company on the TSXV
exceeds C$0.50 per share for any 20 consecutive trading days.
The summary of the LOI in this press release is qualified in its entirety by the full text of the LOI , as
amended, and the IRA, each of which can be accessed on www.SEDARPLUS.ca under the Company's
profile. Please refer to the LOI for more information in respect of the Offering.
The securities issued in connection with the first tranche of the Offering are subject to certain hold periods
and/or such other further restrictions as may apply under foreign securities laws.
Early Warning
Green Mineral Investors LLC (“GMI”), together with its sole manager Mr. Steve Durbin, each of 336 Loring
Ave., Los Angeles, California 90024 United States, report that on October 6, 2023, further to a binding
letter of intent between Electric Metals (USA) Limited (“EML”) and Quail Bend LLC dated May 12, 2023, a
copy of which is available under EML’s profile on SEDAR+ at www.sedarplus.ca, GMI acquired 14,255,319
units of EML (“Units”) at a price per Unit of C$0.235 for an aggregate purchase price of C$ 3,349,999.97
pursuant to a private placement of EML (the “Closing”). The acquired Units are comprised of an aggregate
of 14,255,319 common shares (“Shares”) and 14,255,319 Share purchase warrants (“Warrants”) of EML.
Each Warrant is exercisable to acquire one additional Share at an exercise price of C$0.35 for a period of
24 months from issuance. The acquisition of the Shares and Warrants did not take place across the
facilities of any market.
Immediately prior to the Closing, (i) Steve Durbin, sole manager of GMI, held 2,311,000 Shares
representing approximately 1.77% of the then-issued and outstanding Shares on a non-diluted basis prior
to the Closing and no other securities of EML, and (ii) GMI held 7,021,277 Shares representing
approximately 5.38% (approximately 7.15% cumulatively with Steve Durbin) of the then -issued and
outstanding Shares on a non -diluted basis prior to the Closing, 7,021,277 Warrants representing
approximately 31.56% of th e then-issued and outstanding Warrants prior to the Closing ( 10.21% on a
post-conversion basis assuming only the exercise of the Warrants then held by GMI; 11.90% on a post -
conversion basis assuming only the exercise of the Warrants held by GMI and aggregated with the Share
holdings of Mr. Steve Durbin) and no other securities of EML.
Immediately following the Closing, (i) Steve Durbin, sole manager of GMI, held 2,311,000 Shares
representing approximately 1.60% of the issued and outstanding Shares on a non -diluted basis
immediately following the Closing and no other securities of EML, and (ii) GMI held 21,276,596 Shares
representing approximately 14.70% (approximately 16.30% cumulatively with Steve Durbin) of the issued
and outstanding Shares on a non -diluted basis immediately following the Closing, 21,276,596 Warrants
representing approximately 58.29% of the issued and outstanding Warrants immediately following the
Closing ( 25.64% on a post -conversion basis assuming only the exercise of the Warrants held by GMI;
27.03% on a post -conversion basis assuming only the exercise of the Warrants held by GMI and
aggregated with the Share holdings of Mr. Steve Durbin) and no other securities of EML.
As a result of the Closing, the securityholding percentage of GMI increased by approximately 9.32% in
respect of the Shares and 26.73% in respect of the Warrants.
GMI has acquired the Shares and Warrants for investment purposes. GMI may in the future take such
actions in respect of its holdings in EML as GMI may deem appropriate in light of the circumstances then
existing, including the purchase of additional securi ties of EML through open market purchases or
privately negotiated transactions or the sale of all or a portion of GMI’s holdings in the open market or in
privately negotiated transactions to one or more purchasers, subject in each case to applicable securities
law.
A copy of the early warning report to which this news release relates can be obtained from Steve Durbin
at (917) 622-5200 or on EML’s SEDAR+ profile at www.sedarplus.ca.
About Electric Metals (USA) Limited
Electric Metals (USA) Limited (TSXV: EML) (OTCQB: EMUSF) is a U.S.-based mineral development company
with manganese and silver projects geared to supporting the transition to clean energy. The Company’s
principal asset is the Emily Manganese Project in Minnesota, which has been the subject of considerable
technical studies, including a National Instrument 43-101 Technical Report – Resource Estimate, with over
US$26 million invested to date. The Company’s mission in Minnesota is to become a domestic U.S.
producer of high purity, high-value manganese metal and chemical products for supply to U.S. energy,
technology and industrial markets. With manganese playing a critical and prominent role in lithium -ion
battery formulations, and with no current domestic s upply or active mines for manganese in North
America, the development of the Emily Manganese Project represents a significant opportunity for
America, the State of Minnesota and for the Company’s shareholders. In addition, the Company owns and
operates the Corcoran Silver-Gold Project and the Belmont Silver Project in Nevada, with the former also
having been the subject of a National Instrument 43-101 Technical Report – Resource Estimate.
For further information, please contact:
Electric Metals (USA) Limited
Gary Lewis
CEO & Director
T: +1 (647) 846 5299
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 release.
Forward-Looking Information
This news release contains “forward-looking information” and “forward-looking statements” (collectively,
“forward-looking information”) within the meaning of applicable securities laws. Forward -looking
information is generally identifiable by use of the words “believes,” “may,” “plans,” “will,” “anticipates,”
“intends,” “could”, “estimates”, “expects”, “forecasts”, “projects” and similar expressions, and the
negative of such expressions.
Forward-looking statements in this news release include, but are not limited to, statements with respect
to the use of proceeds of the Final Tranche closing. These statements address future events and conditions
and so involve inherent risks, uncertainties and other factors that could cause actual events or results to
differ materially from estimated or anticipated events or results implied or expressed in such forward -
looking statements. Such risks include, but are not limited to, the failure to obtain all necessary stock
exchange and regulatory approvals. Forward-looking information is based on the reasonable assumptions,
estimates, analysis and opinions of management made in light of its experience and perception of trends,
current conditions and expected developments, and other factors that management believes are relevant
and reasonable in the circumstances at the date such statements are made. Although the Company h as
attempted to identify important factors that could cause actual results to differ materially from those
contained in forward -looking information, there may be other factors that cause results not to be as
anticipated. There can be no assurance that such information will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such information. Accordingly, readers
should not place undue reliance on forward-looking information.
All forward-looking information herein is qualified in its entirety by this cautionary statement, and the
Company disclaims any obligation to revise or update any such forward-looking information or to publicly
announce the result of any revisions to any of the forward-looking information contained herein to reflect
future results, events, or developments, except as required by law.
Certain information under “Early Warning” has been furnished by third parties. The Company takes no
responsibility for the adequacy or accuracy of such information.