Commerce Resources Corp. Announces Private Placement of Flow-Through Units to Raise Gross Proceeds of up to $5,040,000
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NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES
Commerce Resources Corp. Announces Private Placement
of Flow-Through Units to Raise Gross Proceeds of up to $5,040,000
June 6, 2024 – Commerce Resources Corp. (TSXv: CCE, FSE: D7H0) (the “ Company” or
“Commerce”) is pleased to announce a non -brokered private placement offering of up to
28,000,000 charity flow-through units (each, a " FT Unit") at a price of $0. 18 per FT Unit for
aggregate gross proceeds of up to $5,040,000 (the "Offering"). Each FT Unit will be comprised
of one common share in the capital of the Company (each, a “ FT Share”) and one transferable
share purchase warrant (each, a “Warrant”). Each Warrant shall entitle the holder to receive one
non-flow-through common share in the capital of the Company (each, a “ Warrant Share”) at a
price of $0.25 per Warrant Share at any time before the date that is two (2) years following the
date of issuance. The FT Units are being issued pursuant to a charity arrangement structured by
Peartree Securities Inc.
The Company also announces that it has entered into an agreement (“Term Sheet”) with Churchill
SIG Pty Ltd. (“Churchill”), whereby Churchill will act as lead manager, for a term of up to three
(3) months, to introduce potential qualified subscribers (the “ Services”) to the Company in
connection with the Offering. Churchill will not provide the Services in Canada or for the benefit
of Canadian residents, and any potential subscribers introduced by Churchill will not be residents
of Canada.
As consideration for the Services, and upon completion of the Offering, the Company has agreed
to pay Churchill a cash fee (the “Cash Fee”) equal to 5% of the amount raised under the Offering
from persons introduced by Churchill, and to issue such number of non-transferable share purchase
warrants (the “Finder’s Warrants”) that equals 12.5% of the total number of FT Units issued to
persons introduced by Churchill under the Offering. Each Finder’s Warrant will entitle the holder
to acquire one common share (a “Finder’s Warrant Share”) in the capital of the Company at a
price of $0.20 per Finder’s Warrant Share for a period of two (2) years from the date of issuance
of the Finder’s Warrants. The Company has also agreed to pay for Churchill’s reasonable fees and
expenses in connection with the Services, up to $10,000. Churchill shall have a right of first refusal
to act as lead manager in connection with any other equity offerings undertaken by the Company
within a 12 -month period following completion of the Offering. The FT Units, FT Shares,
Warrants, Warrant Shares, Finder’s Warrants and Finder’s Warrant Shares are collectively referred
to herein as the “Securities”.
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The Offering will be conducted pursuant to one or more prospectus exemptions available to the
Company, including, without limitation, the “accredited investor” exemption set out in Section 2.3
of National Instrument 45-106 – Prospectus Exemptions and the prospectus exemption set out in
BC Instrument 72-503 – Distribution of Securities Outside British Columbia.
In addition to the fee payable to Churchill in connection with investors introduced to the Company
by Churchill, the Company may pay f inders’ fees consisting of cash, securities or a combination
thereof to other parties in connection with the Offering, all in accordance with the policies of the
TSX Venture Exchange (the “Exchange”).
The Offering is expected to close on or about June 18, 2024, or on any other date or dates as the
Company may determine, and is subject to certain conditions including, but not limited to, the
receipt of all necessary regulatory and other approvals including the acceptance of the Exchange.
The Securities, and the underlying securities, will be subject to a hold period of four months and
one day from the date of closing.
Certain insiders of the Company are anticipated to participate in the Offering, and the participation
of insiders will be considered a related party transaction subject to Multilateral Instrument 61-101
– Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company
intends to rely on exemptions from the formal valuation and minority shareholder approval
requirements provided under subsections 5.5(a) and 5.7(1)(a) of MI 61 -101 on the basis that
participation in the Offering by insiders will not exceed 25% of the Company’s market
capitalization.
The FT Shares will qualify as "flow-through shares" (within the meaning of subsection 66(15) of
the Income Tax Act (Canada) (the " Tax Act"). An amount equal to the gross proceeds from the
issuance of the FT Units will be used to incur eligible resource exploration expenses which will
qualify as "Canadian exploration expenses" (as defined in the Tax Act). Qualifying Expenditures
in an aggregate amount not less than the gross proceeds raised from the issue of the FT Units will
be incurred (or deemed to be incurred) by the Company on or before December 31, 2025 and will
be renounced by the Company to the initial purchasers of the FT Shares with an effective date no
later than December 31, 2024. The gross proceeds from the sale of the FT Units will be used to
underwrite the upcoming drilling program for the niobium targets on the claims owned by the
Company in Nunavik, Quebec.
None of the securities sold in connection with the Offering will be registered under the United
States Securities Act of 1933, as amended, and no such securities may be offered or sold in the
United States absent registration or an applicable exemption fro m the registration requirements.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful.
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About Commerce Resources Corp.
Commerce Resources Corp. is a junior mineral resource company focused on the development of
the Ashram Rare Earth and Fluorspar Deposit located in Quebec, Canada. The Company is
positioning to be one of the lowest cost rare earth producers globally, with a specific focus on
being a long-term supplier of mixed rare earth carbonate and/or NdPr oxide to the global market.
The Ashram Deposit is characterized by simple rare earth (monazite, bastnaesite, xenotime) and
gangue (carbonates) mineralogy, a large tonnage resource at favourable grade, and has
demonstrated the production of high -grade (>45% REO) mineral concentrates at high recovery
(>70%) in line with active global producers. In addition to being one of the largest rare earth
deposits globally, Ashram is also one of the largest fluorspar deposits globally and has the potential
to be a long-term supplier to the met-spar and acid-spar markets.
For more information, please visit the corporate website at www.commerceresources.com or email
On Behalf of the Board of Directors
COMMERCE RESOURCES CORP.
“Chris Grove”
Chris Grove
President and Director
Tel: 604.484.2700
Email: [email protected]
Web: http://www.commerceresources.com
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 Statements
This news release includes certain “forward -looking statements” under applicable Canadian securities legislation
that are not historical facts. Forward -looking statements involve risks, uncertainties, and other factors that could
cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied
by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to,
statements with respect to the Services to be pr ovided by Churchill, the expectations of management regarding the
proposed Offering, the expectations of management regarding the use of proceeds of the Offering, closing conditions
for the Offering, the expiry of hold periods for securities distributed pursuant to the Offering, that Exchange approval
is required for the proposed Offering, that the Ashram deposit has the potential to become one of the largest fluorspar
deposits and a long-term supplier to the mixed rare earth carbonate, NdPr oxide, and met-spar and acid-spar markets;
and that the Company is positioning to be one of the lowest cost rare earth element producers globally. Although the
Company believes that the expectations reflected in the forward-looking information are reasonable, there can be no
assurance that such expectations will prove to be correct. Such forward -looking statements are subject to risks and
uncertainties that may cause actual results, performance or developments to differ materially from those contained in
the statements including that: the Company may not complete the Offering on terms favorable to the Company or at
all; the Exchange may not approve the Offering; the proceeds of the Offering may not be used as stated in this news
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release; the Company may be unable to satisfy all of the conditions to the Closing; and those additional risks set out
in the Company’s public documents filed on SEDAR at www.sedar.com. Although the Company believes that the
assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not
be placed on these statements, which only apply as of the date of this news release, and no assurance can be given
that such events will occur in the disclosed time frames or at all. Except where required by law, the Company disclaims
any intention or obligation to update or revise any forward-looking statement, whether as a result of new information,
future events, or otherwise.