Update ON Acquisition of 100% Interest IN LA Loutre and LAC Des Îles Flake Graphite Properties and Brokered Private Placement
#439- 7184 120th Street, Surrey, B.C. V3W 0M6
UPDATE ON ACQUISITION OF 100% INTEREST IN LA LOUTRE AND LAC DES ÎLES FLAKE
GRAPHITE PROPERTIES AND BROKERED PRIVATE PLACEMENT
Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any
failure to comply with this restriction may constitute a violation of U.S. Securities Laws.
September 16, 2019 (Vancouver, B.C. and Montreal, Quebec) Lomiko Metals Inc. (“Lomiko”) (TSX -
V: LMR, OTC: LMRMF, FSE: DH8C ) and Quebec Precious Metals (“QPM”) (TSX.V: CJC)
announces that f urther to the Company’s press release dated Decembe r 31, 2018 , the Company wishes to
update shareholders regarding its option to earn a 100% of the La Loutre Flake and Lac des Îles Flake
Graphite Properties, Quebec (the “Properties”). The Company has completed its initial option and has earned
its 80% interest in the Properties.
Pursuant to an agreement dated December 22, 2018, the Company and Quebec Precious Metals Inc. (“QPM”)
(previously known as Canada Strategic Metals Inc.) agreed to extend two options agreements relating to the
Properties which allow the Company to earn a 100% ownership. Pursuant to an amendment dated May 13, 2016,
in order to earn a further 20% interest for a total of 100%, the Company was to issue an aggregate of 5,000,000
shares (pre-consolidation) (2,500,000 on or before July 31, 2017 and 2,500,000 on or before December 31, 2018)
and fund exploration expenditures of an aggregate of $1,125,000 ($250,000 by December 31, 2016; $375,000 by
December 31, 2017 and $500,000 by December 31, 2018). The parties agreed to extend the deadline date for the
Company to fund exploration work of $1,125,000 to December 31, 2019 and the Company shall forthwith, upon
regulatory approval, issue 500,000 common shares (5,000,000 pre-consolidation) shares. In order to close the
transaction, the Company must have adequate funds available and the transaction is subject to the approval of
the TSX Venture Exchange. The transaction is arm’s length.
Further to the press release dated August 20, 2019 announcing the engagement of Leede Jones Gable Inc. (the
"Agent") as lead agent on a commercially reasonable agency basis to undertake a brokered private placement
(the “Offering”) of a combination of Units (as hereinafter defined) and FT Shares (as hereinafter defined) for
gross proceeds of up to $2,750,000, the Company discloses that it will be relying on certain prospectus
exemptions including but not limited to, the Existing Security Holder Exemption and BC Instrument 45-536
Exemption from prospectus requirement for certain distributions through an investment dealer . An
exemption where the purchaser has obtained advice regarding suitability from a person registered as an
investment dealer.
Subject to applicable securities laws, the Company will permit each person or company who, as of September
13, 2019 (being the record date set by the Company pursuant to Multilateral CSA Notice 45-313 – Prospectus
Exemption for Distributions to Existing Security Holders) (“CSA 45- 313”), who hold common shares as of
that date (a “Current Shareholder”) to subscribe for the Units and FS Shares that will be distributed pursuant
to the Offering, provided that the Existing Security Holder Exemption is available to such person or company.
Pursuant to CSA 45-313, each subscriber relying on the Existing Security Holder Exemption may subscribe
for a maximum of 300,000 Units or 300,000 FS Shares, being such amount of Units and FS Shares that results
in an acquisition cost of less than or equal to $15,000 for such subscribers, unless a subscriber is re sident in
a jurisdiction of Canada and has obtained advice regarding the suitability of the investment from a registered
investment dealer (in which case such maximum subscription amount will not apply). In the event that
aggregate subscriptions for Units or FT Shares under the Offering exceed the maximum number of securities
to be distributed, then Units will be sold to qualifying subscribers on a pro rata basis based on the number of
Units or FT Shares subscribed for . In addition to conducting the Offer ing pursuant to the Existing Security
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Holder Exemption, the Company will also accept subscriptions for Units or FT Shares where other prospectus
exemptions are available. Any Current Shareholder subscribing for Units or FT Shares pursuant to a
prospectus exemption other than the Existing Security Holder Exemption will not be limited to a maximum
of 300,000 Units or 300,000 FT Shares.
The Company also advises that the insiders of the Company may also participate in the financing, which will
be completed pursuant to available related party exemptions under Multilateral Instrument 61-101 Protection
of Minority Security Holders in Special Transactions.
Up to 20,000,000 units (the “Units”) of the Company will be offered at $0.05 per Unit to raise gross proceeds
of up to $1,000,000. Each Unit will consist of one (1) common share and one half of one (1/2) common
share purchase warrant (“Warrant”). Each fu ll Warrant shall entitle the holder to acquire one (1) common
share at $0.07 per share for a period of 24 months following closing. Up to 35,000,000 flow through shares
(the “FT Shares”) will be offered at $0.05 per FT Share for gross proceeds of up to $1,750,000.
The gross proceeds from the issuance of the FT Shares will be used for Canadian exploration expenses and
will qualify as flow -through mining expenditures, as defined in Subsection 127(9) of the Income Tax Act
(Canada), which will be renounced t o the subscribers with an effective date no later than Dec. 31, 2019, to
the initial purchasers of the offered securities in an aggregate amount not less than the gross proceeds raised
from the issue of the flow -through shares, as applicable, and, if the qualifying expenditures are reduced by
the Canada Revenue Agency, the company will indemnify each FT subscriber for any additional taxes
payable by such subscriber as a result of the company's failure to renounce the qualifying expenditures as
agreed.
The net proceeds from the Offering of the Units and the gross proceeds from the Offering of FT Shares will
be primarily used for : (1) approximately $50,000 for a new Resource Estimate prepared in accordance NI
#43-101 regulations which will include recent drill results from the Refractory Zone; (2) approximately
$700,000 for completion of work required for a Preliminary Economic Assessment (PEA), including but not
limited to, metallurgical/engineering testing and drilling, community relations, testing for conversion to
spherical graphite for use in graphite anodes, environmental assessment and extraction and processing cost
studies; (3) fund exploration work of $1,125,000 to December 31, 2019, $425,000 on exploration in 2020;
and (4) approximately $150,000 to pursue potential off -take partners, fees and for general working capital.
While the Company intends to spend the net proceeds from the Offering as stated above, there may be
circumstances where, for sound business reasons, funds may be reallocated at the discretion of the Board.
The closing of the Offering is expected to occur on or about October 30, 2019. Closing is subject to a number
of prescribed conditions, including, without limitations, approval of the TSX Venture Exchange. All the
securities issued under the Offering are subject to resale restrictions under applicable securities legislation.
Offering Jurisdictions
The Offering will take place by way of a brokered private placement to qualified investors in such provinces
of Canada as the Agent may designate, and otherwise in those jurisdictions where the Offering can lawfully
be made under applicable exemptions.
Agent's Compensation
On the Closing of the Offering, the Company has agreed to pay to the Agent, subject to certain exclusions, a
commission equal to 8% of the gross proceeds arising from the Offering. At the closing of the Offering, the
Company will also issue to the Agent non-transferable warrants exercisable at any time up to 24 months from
closing, to acquire common shares from treasury in an amount equal to 8% of the aggregate number of units
and FT shares issued pursuant to the Offering.
The Company discloses that there are no material facts or material changes about the Company that has not
been generally disclosed.
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The Corporation does not expect to provide any offering materials to subscribers in connection with the
Offering.
For more information on the Company, review the website at www.lomiko.com, contact A. Paul Gill at 604-
729-5312 or email: [email protected].
On Behalf of the Board,
LOMIKO METALS INC.
A. Paul Gill,
Chief Executive Officer
We seek safe harbor.
Neither 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.
This news release does not constitute an offer to sell, or the solicitation of an offer to buy securities in any jurisdiction in which such offer or sol icitation
would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The securities offered under the offering have not
been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state of the
United States, and may not be offered or sold in the United States or to, or for the account or benefit of, any U.S. Person (as defined in Regulation S of the
Securities Act) or a person in the United States, unless an exemption from such registration requirements is available.
Forward Looking Statements
This release includes forward-looking statements regarding Lomiko and its business. Such statements are based on the current expectations and views of
future events of Lomiko’s management. In some cases, the forward- looking statements can be identified by wor ds or phrases such as “may”, “will”,
“expect”, “plan”, “anticipate”, “intend”, “potential”, “estimate”, “believe” or the negative of these terms, or other similar expressions intended to
identify forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as
a result of the failure to consummate the project financing, the economic feasibility of the La Loutre Project, known and unk nown risk factors and
uncertainties affecting Lomiko, including risks regarding the resource industry, economic factors and the equity markets generally and many other fac tors
beyond the control of Lomiko. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based
on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements,
or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement
or information. Accordingly, readers should not place undue reliance on any forward- looking statements or information. Forward-looking statements
speak only as of the date on which they are made and Lomiko undertakes no obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events, or otherwise, except as required by applicable securities laws.