Eureka Lithium (formerly Scout Minerals) Announces Completion of Acquisition and Closing of Concurrent Equity Financing
Eureka Lithium (formerly Scout Minerals) Announces Completion of
Acquisition and Closing of Concurrent Equity Financing
Vancouver, British Columbia, June 1 st, 2023 – Eureka Lithium Corp. (formerly Scout Minerals
Corp.) (CSE: ERKA (formerly SCTM)) (“ Eureka” or the “ Company”) is pleased to announce,
further to its news releases of April 13, 2023, April 18, 2023, April 19, 2023 and May 8, 2023, that
it has completed the acquisition of a large-scale land package prospective for spodumene-bearing
lithium pegmatites in Northern Quebec’s under -explored Nunavik region which hosts two
operating nickel mines (the “ Acquisition”) and has closed the first tranche of its private
placement, completing the sale of 9,553,425 subscription receipts fo r gross proceeds to the
Company of $5,185,200 (the “Concurrent Financing”).
Concurrent Financing
In connection with the Acquisition, the Company completed the first tranche of its Concurrent
Financing, issuing: (i) 337,692 Quebec super flow-through subscription receipts of the Company
(the “Super FT Subscription Receipts”) at a price of $0.65 per Super FT Subscription Receipt,
for gross proceeds of approximately $ 219,500; (ii) 3,578,333 flow-through subscription receipts
of the Company (the “ FT Subscrip tion Receipts”) at a price of $0.60 per FT Subscription
Receipt, for gross proceeds of $2,147,000; and (iii) 5,637,400 non-flow-through subscription
receipts of the Company (the “Non-FT Subscription Receipts”, and together with the Super FT
Subscription Receipts and the FT Subscription Receipts, the “Subscription Receipts”) at a price
of $0.50 per Non-FT Subscription Receipt, for gross proceeds of $2,818,700. In aggregate, the
Company raised gross proceeds of $5,185,200..
The Company paid finder’s fees totaling $130,977.99 and issued 352,466 broker warrants (each,
a “Broker Warrant”) to certain finders in connection with the sale of the Subscription Receipts.
Each Broker Warrant entitles the holder to acquire one common share (a “Common Share”) at a
price of $0.75 for a period of 24 months. The Broker Warrants are subject to a statutory hold
period of four months and a day.
The net proceeds of the Concurrent Financing will be used for qualified expenditures in respect
of the mineral claims a cquired pursuant to the Acquisition, and, in the case of the Non -FT
Subscription Receipts, also for general working capital.
As a result of the completion of the Acquisition: (i) each Super FT Subscription Receipt has
automatically converted into one unit of the Company comprising one Common Share that
qualifies as a “flow -through share” as defined in the Income Tax Act (Canada) and one-half of
one flow-through common share purchase warrant that qualifies as a “flow -through share” as
defined in the Income T ax Act (Canada) (each whole flow -through common share purchase
warrant, a “Super FT Warrant”), with each Super FT Warrant entitling the holder to purchase one
Common Share (a “Super FT Warrant Share”) at a price of $0.85 per Super FT Warrant Share
for a period of two years; (ii) each FT Subscription Receipt has automatically converted into one
unit of the Company comprising one Common Share that qualifies as a “flow -through share” as
defined in the Income Tax Act (Canada) and one -half of one flow -through co mmon share
purchase warrant that qualifies as a “flow -through share” as defined in the Income Tax Act
(Canada) (each whole flow-through common share purchase warrant, a “FT Warrant”), with each
FT Warrant entitling the holder to purchase one Common Share ( a “FT Warrant Share ”) at a
price of $0.85 per FT Warrant Share for a period of two years after the date of issuance; and (iii)
each Non-FT Subscription Receipt has automatically converted into one unit of the Company
comprising one Common Share and one -half of one common share purchase warrant (each
whole common share purchase warrant, a “ Non-FT Warrant ”), with each Non -FT Warrant
entitling the holder to purchase one Common Share (a “ Non-FT Warrant Share”) at a price of
$0.75 per Non-FT Warrant Share for a period of two years.
The Acquisition
Eureka has acquired from vendors, including Shawn Ryan, 100% of a 1,408 sq. km land package
covering Raglan West, Raglan South and New Leaf District in Northern Quebec, in exchange for
$1,200,000 in cash, 8,000,000 c ommon shares of the Company (the “ Consideration Shares”)
and the grant of a 1% net smelter return (NSR) royalty. The Consideration Shares are subject to
an escrow arrangement whereby one-third (1/3) of the Consideration Shares will be released from
escrow every six (6) months after the closing of the Agreement (“ Closing”), with the first such
release date to occur on the date that is six months from Closing.
Eureka’s Nunavik Lithium Projects:
• Raglan West District - 443 sq. km claim block beginning 33 km southwest of the
community of Salluit which has year -round airport access and a seasonal port for barge
landing;
• Raglan South District - 229 sq. km claim block which contains 12.3% of the 99.96
percentile lithium samples in lake sediments in the Quebec government data base (7
widely spaced samples out of the top 57 samples in the province’s entire data base) that
contain >60 ppm Li), approximately 80 km southwest of the Raglan Nickel Mine; and
• New Leaf District - 736 sq. km covering multiple claim blocks in areas of overlapping
geochemical and geophysical anomalies in favorable geology, 120 km southwest of the
community of Tasiujaq and approximately 350 km south of Raglan South.
Each of the above project areas h as district scale discovery potential and features some of the
highest lithium and cesium values in lake sediments (99th percentile and above) in the Quebec
government data base. In addition, a review of historic data for the region reveals the presence
of mapped pegmatites in multiple rock units, compelling overall geology, and geophysical
anomalies that point to deep -seated structures that may have created an ideal environment for
the discovery of lithium mineralization across broad areas.
Eureka’s plan is to carry out an extensive near-term exploration program that includes drill testing
of high priority targets over the coming months given abundant outcrop including many mapped
pegmatites over 1,408 sq. km of Eureka’s leading Nunavik land position. The Agreement includes
the acquisition of large strategic claim blocks in three areas of Nunavik never previously
recognized for the potential of hosting high-grade lithium mineralization. Nunavik comprises more
than one-third of Quebec, underscoring the scale potential of this geologically rich part of the
province.
Completion of the Acquisition and of the first tranche of the Concurrent Financing were approved
by a majority of the Company’s shareholders. The Company thanks its shareholders for their
support and loyalty.
Mr. Jeffrey Wilson, Eureka CEO, commented: "We are pleased to complete this important
property asset acquisition and concurrent financing. This signifies an important step in Eureka’s
transition into the lithium exploration space and provides the Company and its shareholders with
immediate exposure to an exciting property portfolio and the financial capacity to commence an
aggressive first phase of ground exploration. Crews are currently preparing to initiate an extensive
field program of pro specting, sampling, and mapping over the entire project portfolio, with a
specific focus on prospective zones hosting known lithium values as reported in Quebec
government lake sediment sampling surveys. The Company looks forward to commencing this
important work and expects to provide ongoing updates as work progresses.”
About Eureka Lithium Corp.
Eureka Lithium Corp. is a junior mining company engaged in the acquisition, exploration and
development of mineral properties.
Qualified Person
The scientific and technical content of this news release has been reviewed and approved by
Afzaal Pirzada, P. Geo., who is a “qualified person” as defined by National Instrument 43 -101 -
Standards of Disclosure for Mineral Projects.
Contact information
For More Information please contact:
Jeffrey Wilson: Chief Executive Officer
E-mail: [email protected]
Certain statements contained in this news rel ease, including statements which may contain words such as “expects”,
“anticipates”, “intends”, “plans”, “believes”, “estimates”, or similar expressions, and statements related to matters which
are not historical facts, such as statements regarding the use of proceeds of the Concurrent Financing and the
Company’s future plans with respect to the acquired mineral plans, are forward-looking information within the meaning
of applicable securities laws. Such forward -looking statements reflect management’s expec tations and are based on
certain factors and assumptions and involve known and unknown risks and uncertainties which may cause the actual
results, performance, or achievements to be materially different from future results, performance, or achievements
expressed or implied by such forward -looking statements. These factors should be considered carefully, and readers
should not place undue reliance on the Company’s forward -looking statements. The Company believes that the
expectations reflected in the forward -looking statements contained in this news release are reasonable, but no
assurance can be given that these expectations will prove to be correct, nor that the name change and symbol change
will be completed as contemplated, or at all. The Company undertak es no obligation to release publicly any future
revisions to forward-looking statements to reflect events or circumstances after the date of this news or to reflect the
occurrence of unanticipated events, except as expressly required by law.
The CSE has not reviewed, approved, or disapproved the contents of this press release.