Filed
Pursuant To General Instruction II.L of Form F-10
Registration
No. 333-256822
PROSPECTUS
SUPPLEMENT
(To the Short Form Base Shelf Prospectus dated June 16, 2021)
NEW
ISSUE |
SEPTEMBER
1, 2022 |
Up
to US$40,000,000
Common Shares
This
prospectus supplement (the “prospectus supplement”) of Uranium Royalty Corp. (the “Company”),
together with the accompanying short form base shelf prospectus to which this prospectus supplement relates dated June 16, 2021 (the
“prospectus”) qualifies the distribution (the “Offering”) of common shares (the “Offered
Shares”) of the Company having an aggregate sale price of up to US$40,000,000 (or the equivalent in Canadian dollars determined
using the daily exchange rate posted by the Bank of Canada on the date the Offered Shares are sold). See “Plan of Distribution”
and “Description of Share Capital”.
The
Company is permitted, under the multi-jurisdictional disclosure system adopted by the United States and Canada (“MJDS”),
to prepare this prospectus supplement and the accompanying prospectus in accordance with Canadian disclosure requirements.
Purchasers of the Offered Shares should be aware that such requirements are different from those of the United States. Financial
statements incorporated herein by reference have been prepared in accordance with International Financial Reporting Standards, as
issued by the International Accounting Standards Board (“IFRS”), and such financial statements are reported in Canadian
dollars. They may not be comparable to financial statements of United States companies.
Purchasers
of the Offered Shares should be aware that the acquisition of the Offered Shares may have tax consequences both in the United States
and in Canada. Such consequences for purchasers who are resident in, or citizens of, the United States or who are resident in Canada
may not be described fully herein. Purchasers of the Offered Shares should read the tax discussion contained in this prospectus
supplement and consult their own tax advisors. See “Certain Canadian Federal Income Tax Considerations” and “Certain
United States Federal Income Tax Considerations”.
The
enforcement by investors of civil liabilities under United States federal securities laws may be affected adversely by the fact that
the Company is incorporated under the laws of Canada, certain of the officers and directors are not residents of the United States,
that some or all of the Agents or experts named in this prospectus supplement and in the accompanying prospectus are not residents
of the United States, and that a substantial portion of the assets of the Company and such persons are located outside the United
States. See “Enforceability of Certain Civil Liabilities”.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
The
issued and outstanding common shares of the Company are listed and posted for trading on the TSX Venture Exchange (“TSXV”)
under the symbol “URC”, and on the Nasdaq Capital Market under the symbol “UROY”. Certain outstanding and listed
common share purchase warrants of the Company (the “Listed Warrants”) are listed on the TSXV under the symbol
“URC.WT”. Our common shares are registered under Section 12(b) of the United States Securities Exchange Act of 1934, as amended
(the “Exchange Act”). On August 31, 2022, the last trading day before the date of this prospectus supplement,
the closing price of the common shares on the TSXV was C$4.16 per common share, and on the Nasdaq Capital Market was US$3.19
per common share. The closing price of the Listed Warrants as at the last trading day prior to the date of this prospectus supplement
was C$2.24 per Listed Warrant. The TSXV has conditionally approved the listing of the Offered Shares distributed under the Offering,
subject to the Company fulfilling all of the requirements of the TSXV. The Company has submitted a Listing of Additional Shares Notification
form for the Offered Shares to the Nasdaq Stock Market.
The
Company has entered into an equity distribution agreement dated September 1, 2022 (the “Distribution Agreement”)
with BMO Nesbitt Burns Inc., Canaccord Genuity Corp., Paradigm Capital Inc. and TD Securities Inc. (the “Canadian Agents”),
and BMO Capital Markets Corp., Canaccord Genuity LLC, H.C. Wainwright & Co., LLC. and TD Securities (USA) LLC (the “U.S.
Agents” and, together with the Canadian Agents, the “Agents”), pursuant to which the Company
may distribute up to US$40,000,000 (or the equivalent in Canadian dollars determined using the daily exchange rate posted by the Bank
of Canada on the date the Offered Shares are sold) of Offered Shares in the Offering from time to time through the Agents, as agents,
in accordance with the terms of the Distribution Agreement. See “Plan of Distribution”. The Offering is being made concurrently
in Canada under the terms of this prospectus supplement and in the United States under the terms of the Company’s registration
statement on Form F-10, as amended (File No. 333-256822) (the “Registration Statement”), filed with the
United States Securities and Exchange Commission (the “SEC”) of which this prospectus supplement forms a part.
Sales
of Offered Shares, if any, under this prospectus supplement will only be made in transactions that are deemed to be “at-the-market
distributions” as defined in National Instrument 44-102 - Shelf Distributions (“NI 44-102”), involving
sales made directly on the TSXV, the Nasdaq Capital Market or on any other trading market for the common shares of the Company in Canada
or the United States. The Offered Shares will be distributed at market prices prevailing at the time of the sale. As a result, prices
may vary as between purchasers and during the period of distribution. The Agents are not required to sell any specific number or dollar
amount of Offered Shares, but will use their commercially reasonable efforts to sell the Offered Shares pursuant to the terms and
conditions of the Distribution Agreement.
There
is no minimum amount of funds that must be raised under the Offering. This means that the Offering may terminate after only raising a
small portion of the offering amount set out above, or none at all. The Canadian Agents are not registered as broker-dealers in the United
States and, accordingly, will only sell Offered Shares on marketplaces in Canada, and the U.S. Agents are not registered as investment
dealers in any Canadian jurisdiction and, accordingly, will only sell Offered Shares on marketplaces in the United States. See “Plan
of Distribution”.
The
Company will pay the Agents a commission for their services in acting as agents in connection with the sale of Offered Shares pursuant
to the Distribution Agreement (the “Commission”). The amount of the Commission shall not exceed 2.50% of the
gross sales price per Offered Share sold; provided that the Company shall not be obligated to pay the Commission on any sale of
Offered Shares that is not possible to settle due to (i) a suspension or material limitation in trading in securities generally on the
TSXV or the Nasdaq Capital Market, (ii) a material disruption in securities settlement or clearance services in the United States or
Canada or (iii) failure by the applicable Agent to comply with its obligations under the terms of the Distribution Agreement. In addition,
the Company has agreed to reimburse the Agents for certain expenses incurred in connection with the Offering. The Company estimates that
the total expenses that it will incur related to the commencement of the Offering, excluding compensation payable to the Agents under
the terms of the Distribution Agreement, will be approximately C$350,000, exclusive of taxes and disbursements. See “Plan of
Distribution”.
Investing
in the Offered Shares is highly speculative and involves significant risks that you should consider before purchasing such Offered Shares.
The risks outlined in this prospectus supplement, the accompanying prospectus and in the documents incorporated by reference herein and
therein should all be carefully reviewed and considered by prospective investors in connection with an investment in the Offered Shares.
See “Risk Factors”.
In
connection with the sale of the Offered Shares on our behalf, the Agents may be deemed to be an “underwriter” within the
meaning of Section 2(a)(11) of the United States Securities Act of 1933, as amended (the “Securities Act”),
and the compensation of the Agents may be deemed to be underwriting commissions or discounts. The Company has agreed to provide
indemnification and contribution to the Agents against certain liabilities, including liabilities under the Securities Act.
As
sales agents, the Agents will not engage in any transactions to stabilize or maintain the price of the common shares. No underwriter
of the at-the-market distribution, and no person or company acting jointly or in concert with an underwriter, may, in connection with
the distribution, enter into any transaction that is intended to stabilize or maintain the market price of the securities or securities
of the same class as the securities distributed under this prospectus supplement and the related prospectus, including selling an aggregate
number or principal amount of securities that would result in the underwriter creating an over-allocation position in the securities.
See “Plan of Distribution”.
Bank
of Montreal, an affiliate of BMO Nesbitt Burns Inc. and BMO Capital Markets Corp., is the lender under a margin loan agreement among
the Company, the Bank of Montreal, as lender, and BMO Nesbitt Burns Inc. entered into on May 7, 2021, as amended on June 21, 2021 and
December 13, 2021 (the “BMO Margin Loan Agreement”). The Company may repay the BMO Credit Facility (as defined in
the prospectus), from time to time, in accordance with the terms of the BMO Margin Loan Agreement, using net proceeds from the Offering.
Further, the Company has in place a term loan (the “TD Term Loan”) with the Toronto Dominion Bank, an affiliate of
TD Securities Inc. and TD Securities (USA) LLC, Agents under the Offering (the “TD Facility”). Consequently, the Company
may be considered a “connected issuer” of BMO Nesbitt Burns Inc. and TD Securities Inc. under applicable securities laws,
and a “conflict of interest” may be deemed to exist under FINRA Rule 5121(f)(5)(C)(i) if five percent of the net offering
proceeds, not including Agents’ compensation, are intended to be used to reduce or retire the balance of any of the BMO Credit
Facility and the TD Term Loan. However, the Company does not expect to use five percent or more of the net offering proceeds to reduce
or retire the BMO Credit Facility or the TD Facility. See “Plan of Distribution”.
The
Company’s head office is located at 1030 West Georgia Street, Suite 1830, Vancouver, British Columbia, V6E 2Y3, Canada.
The
Company’s registered and records office is located at 925 West Georgia Street, Suite 1000, Vancouver, British Columbia V6C 3L2,
Canada.
Investors
should rely only on the information contained in or incorporated by reference into this prospectus supplement and the accompanying prospectus.
We have not authorized anyone to provide investors with different information. Information contained on our website shall not be deemed
to be a part of this prospectus supplement (including the accompanying prospectus) or incorporated by reference and should not be relied
upon by prospective investors for the purpose of determining whether to invest in the Offered Shares. No offer of the Offered Shares
is being made in any jurisdiction where the offer or sale is not permitted. Investors should not assume that the information contained
in this prospectus supplement is accurate as of any date other than the date on the face page of this prospectus supplement or the date
of any documents incorporated by reference herein.
Unless
otherwise indicated, all references in this prospectus supplement and the accompanying prospectus to “US$” or “$”
are to U.S. dollars, and references to “C$” are to Canadian dollars. See “Financial and Exchange Rate Information”.
TABLE
OF CONTENTS
PROSPECTUS SUPPLEMENT
PROSPECTUS
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement and the accompanying prospectus are part of a registration statement on Form F-10 (File No. 333-256822) that we
filed with the SEC on June 4, 2021, as amended by Amendment No. 1 to Form F-10 that was filed with the SEC on June 16, 2021, and that
was declared effective by the SEC on June 17, 2021 using a “shelf” registration process. This document is in two parts. The
first part is this prospectus supplement, which describes the specific terms of the Offered Shares and also adds to and updates information
contained in the accompanying prospectus and the documents incorporated by reference herein and therein. The second part, the prospectus,
gives more general information, some of which may not apply to the Offered Shares being offered under this prospectus supplement. This
prospectus supplement is deemed to be incorporated by reference into the accompanying prospectus solely for the purposes of the Offering
constituted by this prospectus supplement.
You
should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.
If the description of the Offered Shares or any other information varies between this prospectus supplement and the accompanying prospectus
(including the documents incorporated by reference herein and therein on the date hereof), the investor should rely on the information
in this prospectus supplement.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference herein or in the accompanying prospectus were made solely for the benefit of the parties to such agreement,
including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
We
have not, and the Agents have not, authorized anyone to provide you with different or additional information. If anyone provides you
with any different, additional, inconsistent or other information, you should not rely on it. This prospectus supplement and the accompanying
prospectus contain summaries of certain provisions contained in some of the documents described herein or therein, but reference is made
to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies
of some of these documents have been filed, will be filed or will be incorporated herein by reference as exhibits to the registration
statement, and you may obtain copies of those documents as described below in the section entitled “Where You Can Find More Information.”
Neither
the Company nor the Agents are making an offer to sell or seeking an offer to buy the Offered Shares in any jurisdiction where the offer
or sale is not permitted. You should not assume that the information contained in this prospectus supplement, the accompanying prospectus
and the documents incorporated by reference herein and therein is accurate as of any date other than the date on the front of this prospectus
supplement, the accompanying prospectus or the respective dates of the documents incorporated by reference herein and therein, as applicable,
regardless of the time of delivery of this prospectus supplement or of any sale of the Offered Shares pursuant hereto. Our business,
financial condition, results of operations and prospects may have changed since those dates. Information contained on the Company’s
website should not be deemed to be a part of this prospectus supplement or the accompanying prospectus or to be incorporated by reference
herein or therein and should not be relied upon by prospective investors for the purpose of determining whether to invest in the Offered
Shares.
Market
data and certain industry forecasts used in the prospectus and this prospectus supplement and the documents incorporated by reference
in the prospectus and this prospectus supplement were obtained from market research, publicly available information and industry
publications. We believe that these sources are generally reliable, but the accuracy and completeness of this information is not
guaranteed. We have not independently verified such information, and we do not make any representation as to the accuracy of such
information.
This
prospectus supplement shall not be used by anyone for any purpose other than in connection with the Offering.
Unless
the context otherwise requires, references to “we”, “us”, “our” or similar terms, as well as references
to “URC” or the “Company”, refer to Uranium Royalty Corp. together with our subsidiaries. Uranium Royalty Corp.’s
name and logo are either registered trademarks or trademarks of Uranium Royalty Corp. in the United States and/or other countries. All
other trademarks, service marks or other tradenames appearing in this prospectus supplement and the accompanying prospectus are the property
of their respective owners.
In
this prospectus supplement and the accompanying prospectus, “U3O8” means triuranium octoxide,
a compound of uranium that is converted to uranium hexafluoride for the purpose of uranium enrichment.
This
prospectus supplement includes our trademarks, trade names and service marks, which is protected under applicable intellectual property
laws and are the property of Uranium Royalty Corp., or its subsidiaries. Solely for convenience, trademarks, trade names and service
marks referred to in this prospectus supplement may appear without the ®, ™ or SM symbols, but such references are not intended
to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable
licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks,
trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement
or sponsorship of us by, these other parties.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING INFORMATION
This
prospectus supplement and the accompanying prospectus, including the documents incorporated by reference herein and therein contain “forward-looking
information” within the meaning of applicable Canadian securities laws and “forward-looking statements” within the
meaning of the securities laws in the United States (collectively, “Forward-Looking Statements”). These statements
relate to the expectations of management about future events, results of operations and the Company’s future performance (both
operational and financial) and business prospects. All statements other than statements of historical fact are Forward-Looking Statements.
The use of any of the words “anticipate”, “plan”, “contemplate”, “continue”, “estimate”,
“expect”, “intend”, “propose”, “might”, “may”, “will”, “shall”,
“project”, “should”, “could”, “would”, “believe”, “predict”,
“forecast”, “target”, “aim”, “pursue”, “potential”, “objective”
and “capable” and the negative of these terms or other similar expressions are generally indicative of Forward-Looking Statements.
These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially
from those anticipated in such Forward-Looking Statements. No assurance can be given that these expectations will prove to be correct
and such Forward-Looking Statements should not be unduly relied on. These statements speak only as of the date hereof. In addition, this
prospectus supplement and the accompanying prospectus may contain Forward-Looking Statements attributed to third party industry sources.
Without limitation, this prospectus supplement contains Forward-Looking Statements pertaining to the following: future sales of Offered
Shares in connection with the Offering, use of proceeds; the impacts of the novel coronavirus (“COVID-19”)
on the business of the Company and the operators of the projects underlying its interests the ongoing operation of the properties in
which the Company holds or may hold uranium interests; statements with respect to future events or future performance; the impact of
general business and economic conditions; future debt levels, financial capacity, liquidity and capital resources; anticipated future
sources of funds to meet working capital requirements; future capital expenditures and contractual commitments; expectations respecting
future financial results; expectations with respect to the Company’s financial position; expectations regarding uranium prices
and the impacts of United States and other governmental policies on uranium demand; expectations regarding supply and demand for uranium;
expectations regarding the Company’s business plans, strategies, growth and results of operations; the Company’s dividend
policy; conditions, trends and practices pertaining to the uranium industry and other industries in which uranium is used; the financial
and operational strength of counterparties; production volumes; mineral resources and mine life; governmental regulatory regimes with
respect to environmental matters; and governmental taxation regimes.
Forward-Looking
Statements are based on a number of material assumptions, including those listed here, which could prove to be significantly incorrect:
the anticipated impact of completed acquisitions on the Company’s business; market prices of uranium; global economic and financial
conditions; demand for uranium; uranium supply; industry conditions; the impacts of COVID-19 on the business of the Company and the operators
of the projects underlying its interests; future operations and developments on the properties in which the Company holds or may hold
interests; the ongoing operation of the properties in which the Company holds or may hold uranium interests; and the accuracy of public
statements and disclosure made by the owners or operators of the properties underlying the Company’s interests.
Actual
results could differ materially from those anticipated in these Forward-Looking Statements due to a variety of risks, uncertainties and
other factors, including, without limitation, those referred to in this prospectus supplement and the accompanying prospectus under the
heading “Risk Factors” and in the Company’s Annual Information Form (as defined herein), including the following:
| ● | dependence
on third party operators; |
| ● | the
Company has limited or no access to the operations underlying its interests, including data; |
| ● | risks
faced by owners and operators of the properties underlying the Company’s interest,
including all of the hazards and risks normally encountered in the exploration, development
and production of metals, including title, permit or licensing disputes related to any of
the properties in which the Company holds or may hold royalties, streams or similar interests; |
| ● | the
Company is dependent on future payments from owners and operators of its royalty and other
interests; |
| ● | investment
price risks, which may affect the value of the Company’s current and future equity
investments, including those in Yellow Cake plc (“Yellow Cake”)
and Queen’s Road Capital Investment Ltd. (“QRC”); |
| ● | commodities
price risks, which may affect revenue derived by the Company from its asset portfolio; |
| ● | risks
associated with future acquisitions; |
| ● | global
financial conditions and increased volatility in response to global events, including as
a result of geopolitical factors such as the ongoing conflict in Ukraine and the political
unrest in Kazakhstan; |
| ● | depletion
of mineral reserves by mining companies on the projects underlying the Company’s interests
will not be replenished by discoveries or acquisitions; |
| ● | the
impact of project costs on profit-based royalties, such as net profit interest royalties; |
| ● | the
public acceptance of nuclear energy in relation to other energy sources; |
| ● | the
absence of any public market for uranium; |
| ● | liquidity
risks in connection with the Company’s equity investments, including those in Yellow
Cake and QRC; |
| ● | the
international uranium industry is small, highly competitive and heavily regulated, subject
to extensive government regulation and policies; |
| ● | buy-back
and similar rights held by the operators of the Company’s interests; |
| ● | royalties,
streams and similar interests may not be honored by operators of a project; |
| ● | liquidity,
operating revenue and any inability of the Company to obtain necessary financing when required
on acceptable terms or at all; |
| ● | the
competitive nature of the royalty and streaming business; |
| ● | political
unrest and war, and interests in operations in foreign jurisdictions and emerging markets,
including political unrest in Kazakhstan, which could negatively impact the Company’s
investment in Yellow Cake and its option to purchase uranium from Yellow Cake, as well as
changes in legislation effecting permitting and licensing regimes and taxation policies; |
| ● | impacts
of COVID-19 on projects underlying the Company’s interests; |
| ● | impacts
of COVID-19 on financial markets and commodities prices; |
| ● | interest
rate fluctuations and foreign exchange rate fluctuations; |
| ● | limited
operating history and any inability of the Company to execute its growth strategy; |
| ● | dependence
on key personnel and any inability to attract and retain key employees; |
| ● | litigation; |
| ● | First
Nations land claims; |
| ● | potential
conflicts of interests; |
| ● | the
Company’s dividend policy; |
| ● | any
inability to ensure compliance with anti-bribery and anti-corruption laws; |
| ● | any
future expansion of the Company’s business activities; |
| ● | any
failure to maintain effective internal controls; |
| ● | negative
cash flow from operating activities; and |
| ● | the
other factors discussed under “Risk Factors” herein, in the accompanying prospectus
and in the section entitled “Risk Factors” in our annual information form for
the fiscal year ended April 30, 2022, dated July 27, 2022 (the “Annual Information
Form”), attached as Exhibit 99.1 to our Annual Report on Form 40-F for the
fiscal year ended April 30, 2022, and incorporated by reference herein. |
Should
one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially
from those described in Forward-Looking Statements. Forward-Looking Statements are based on management’s beliefs, estimates and
opinions on the date the statements are made and the Company undertakes no obligation to update Forward-Looking Statements if these beliefs,
estimates and opinions or other circumstances should change, other than as required by applicable laws. Investors are cautioned against
attributing undue certainty to Forward-Looking Statements.
Please
carefully consider the risk factors set out herein under the section entitled “Risk Factors” in the accompanying prospectus
and in the Annual Information Form.
CAUTIONARY
NOTE TO UNITED STATES INVESTORS
We
are permitted under MJDS to prepare the prospectus and this prospectus supplement in accordance with the disclosure requirements of Canada.
Prospective investors in the United States should be aware that such requirements are different from those of the United States. Financial
statements included or incorporated by reference herein have been prepared in accordance with IFRS and are reported in Canadian dollars.
They may not be comparable to financial statements of United States companies.
This
prospectus supplement and the accompanying prospectus, including the documents incorporated by reference herein and therein, as applicable,
have been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of United States
securities laws. Unless otherwise indicated, all mineral reserve and resource estimates included or incorporated by reference in this
prospectus supplement and the accompanying prospectus have been prepared for or by the current or former owners and operators of the
relevant properties, as and to the extent indicated by them, in accordance with National Instrument 43-101 – Standards of Disclosure
for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the
“CIM”) classification system or the 2012 Edition of the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (“JORC”) or Subpart 1300 of Regulation S-K (“S-K 1300”),
as applicable. In accordance with NI 43-101, the Company uses the terms mineral reserves and resources as they are defined in accordance
with the CIM Definition Standards on Mineral Resources and Reserves as adopted by the CIM (the “CIM Definition Standards”).
The
SEC has adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose securities
or transactions are registered with the SEC under the Exchange Act, subject to certain exceptions. These amendments became effective
February 25, 2019 (the “SEC Modernization Rules”) with compliance required for the first fiscal year beginning
on or after January 1, 2021. Under the SEC Modernization Rules, the historical property disclosure requirements for mining registrants
included in SEC Industry Guide 7 has been replaced by S-K 1300. The Company is not required to provide disclosure on its mineral properties
under the SEC Modernization Rules because it is a “foreign private issuer” and it is entitled to file reports under MJDS,
and will continue to provide disclosure under NI 43-101 and the CIM Definition Standards. However, if the Company either ceases to be
a “foreign private issuer” or ceases to be entitled to file reports under MJDS, then the Company will be required to provide
disclosure on its mineral properties under the SEC Modernization Rules. Accordingly, United States investors are cautioned that the disclosure
the Company provides on its mineral properties may be different from the disclosure that the Company would otherwise be required to provide
as a U.S. domestic issuer or a non-MJDS foreign private issuer under the SEC Modernization Rules.
The
SEC Modernization Rules include the adoption of terms describing mineral reserves and mineral resources that are substantially similar
to the corresponding terms under the CIM Definition Standards. As a result of the adoption of the SEC Modernization Rules, the SEC recognizes
estimates of “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources”.
In addition, the SEC amended its definitions of “proven mineral reserves” and “probable mineral reserves” to
be substantially similar to the corresponding CIM Definition Standards.
United
States investors are cautioned that while terms are substantially similar to CIM Definition Standards, there are differences in the definitions
under the SEC Modernization Rules and the CIM Definition Standards. Accordingly, there is no assurance any mineral reserves or mineral
resources that the Company may report as “proven reserves”, “probable reserves”, “measured mineral resources”,
“indicated mineral resources” and “inferred mineral resources” under NI 43-101 would be the same had the Company
prepared the reserve or resource estimates under the standards adopted under the SEC Modernization Rules.
United
States investors are also cautioned that while the SEC recognizes “measured mineral resources”, “indicated mineral
resources” and “inferred mineral resources”, investors should not assume that any part or all of the mineralization
in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. Mineralization described
using these terms has a greater amount of uncertainty as to their existence and feasibility than mineralization that has been characterized
as reserves. Accordingly, investors are cautioned not to assume that any “measured mineral resources”, “indicated mineral
resources”, or “inferred mineral resources” that the Company reports are or will be economically or legally mineable.
Further,
“inferred resources” have a greater amount of uncertainty as to their existence and as to whether they can be mined legally
or economically. Accordingly, U.S. investors are cautioned not to assume that all or any part of inferred resources exist. In accordance
with Canadian rules, estimates of “inferred mineral resources” cannot form the basis of feasibility or other economic studies,
except in limited circumstances where permitted under NI 43-101.
In
addition to NI 43-101, certain resource estimates disclosed in this prospectus supplement and the accompanying prospectus, including
the documents incorporated by reference herein and therein, have been prepared in accordance with JORC, which differs from the requirements
of NI 43-101 and United States securities laws. Accordingly, information contained in this prospectus supplement and the accompanying
prospectus, including the documents incorporated by reference herein and therein, may contain descriptions of the Company’s mineral
deposits that may not be comparable to similar information made public by U.S. companies who prepare their disclosure in accordance with
U.S. federal securities laws and the rules and regulations thereunder.
FINANCIAL
AND EXCHANGE RATE INFORMATION
The
annual consolidated financial statements of the Company incorporated by reference in this prospectus supplement have been prepared in
accordance with IFRS and are reported in Canadian dollars. They may not be comparable to financial statements of United States companies.
In
this prospectus supplement, unless otherwise indicated, all dollar amounts and references to “US$” or “$” are
to U.S. dollars, and references to “C$” are to Canadian dollars.
The
following table sets forth for each period indicated: (i) the exchange rates in effect at the end of the periods indicated; (ii) the
high and low exchange rates during each period; and (iii) the average exchange rates in effect during each period, in each case, as identified
or calculated from the Bank of Canada rate in effect on each trading day during the relevant period. These rates are expressed as U.S.
dollars per C$1.00.
| |
Year ended April 30 ($) | |
| |
2022 | | |
2021 | | |
2020 | |
High | |
| 0.8306 | | |
| 0.8140 | | |
| 0.7710 | |
Low | |
| 0.7727 | | |
| 0.7080 | | |
| 0.6898 | |
Average | |
| 0.7973 | | |
| 0.7649 | | |
| 0.7487 | |
Closing | |
| 0.7817 | | |
| 0.8140 | | |
| 0.7189 | |
On
August 31, 2022, the daily average exchange rate provided by the Bank of Canada in terms of the Canadian dollar was C$1.00 = US$0.7627
(US$1.00 = C$1.3111).
DOCUMENTS
INCORPORATED BY REFERENCE
This
prospectus supplement is deemed to be incorporated by reference in the accompanying prospectus solely for the purpose of the distribution
of the Offered Shares. Information has been incorporated by reference in this prospectus supplement and the accompanying prospectus from
documents filed with the SEC. Copies of the documents incorporated herein by reference may be obtained on request without charge from
the Corporate Secretary of Uranium Royalty Corp at 1030 West Georgia Street, Suite 1830, Vancouver, British Columbia, V6E 2Y3, Canada,
telephone (604) 396-8222 or by accessing the disclosure documents available electronically in Canada on the Canadian System for Electronic
Document Analysis and Retrieval (“SEDAR”), at www.sedar.com. Documents filed with, or furnished to, the SEC
are available electronically in the United States through the SEC’s Electronic Data Gathering and Retrieval System (“EDGAR”),
at www.sec.gov. Our filings through SEDAR and EDGAR are not incorporated by reference in this prospectus supplement except as specifically
set forth herein. The following documents, filed by the Company with the securities commissions or similar authorities in each of the
provinces and territories of Canada, and filed with, or furnished to, the SEC, are specifically incorporated by reference into, and form
an integral part of, this prospectus supplement:
|
1) |
the
Annual Information Form; |
|
|
|
|
2) |
the
management information circular of the Company dated August 20, 2021 regarding the annual general meeting of shareholders of the
Company held on October 14, 2021; |
|
|
|
|
3) |
the
audited annual consolidated financial statements of the Company as at and for the financial years ended April 30, 2022 and 2021,
together with the notes thereto, and the auditors reports thereon; and |
|
|
|
|
4) |
management’s
discussion and analysis of financial condition and results of operations of the Company for the financial year ended April 30, 2022,
dated July 27, 2022. |
Any
document of the type referred to in Item 11.1 of Form 44-101F1 - Short Form Prospectus of National Instrument 44-101 - Short Form
Prospectus Distributions of the Canadian Securities Administrators (other than confidential material change reports, if any) filed by
the Company with any securities commissions or similar regulatory authorities in Canada after the date of this prospectus supplement
and prior to the termination of the Offering shall be deemed to be incorporated by reference in this prospectus supplement. These documents
will be available on SEDAR, which can be accessed at www.sedar.com. Documents referenced in this prospectus supplement, the prospectus
or any of the documents incorporated by reference herein or therein, but not expressly incorporated by reference herein or therein
and not otherwise required to be incorporated by reference herein or therein, are not incorporated by reference in this prospectus
supplement.
If
the Company disseminates a news release in respect of previously undisclosed information that, in the Company’s determination,
constitutes a “material fact” (as such term is defined under applicable Canadian securities laws), the Company will identify
such news release as a “designated news release” for the purposes of this prospectus supplement and the accompanying prospectus
in writing on the face page of the version of such news release that the Company files on SEDAR (each such news release, a “Designated
News Release”), and each such Designated News Release shall be deemed to be incorporated by reference into this prospectus
supplement and the accompanying prospectus for the purposes of the Offering.
In
addition, any other report on Form 6-K or Form 40-F or the exhibits thereto filed or furnished by the Company with the SEC under the
Exchange Act, from the date of this prospectus supplement and prior to the termination or completion of the Offering shall be deemed
to be incorporated by reference as exhibits to the Registration Statement of which this prospectus supplement and the accompanying prospectus
forms a part, but in the case of Form 6-K, only if and to the extent expressly so provided in any such report. The Company’s Reports
on Form 6-K and Annual Reports on Form 40-F are available on EDGAR at www.sec.gov.
The
documents incorporated or deemed to be incorporated herein by reference contain meaningful information relating to the Company and readers
should review all information contained in this prospectus supplement, the accompanying prospectus and the documents incorporated or
deemed to be incorporated herein by reference.
Any
statement contained in this prospectus supplement, the accompanying prospectus or in a document incorporated or deemed to be incorporated
by reference herein or therein shall be deemed to be modified or superseded, for purposes of this prospectus supplement and the accompanying
prospectus, to the extent that a statement contained herein or therein, or in any other subsequently filed document that also is, or
is deemed to be, incorporated by reference herein or therein, modifies or supersedes such statement. The modifying or superseding statement
need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it
modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the
modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to
state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances
in which it was made. Any statement so modified or superseded shall thereafter neither constitute, nor be deemed to constitute, a part
of this prospectus supplement or the accompanying prospectus, except as so modified or superseded.
References
to the Company’s website in any documents that are incorporated by reference into this prospectus supplement and the prospectus
do not incorporate by reference the information on such website into this prospectus supplement and the prospectus and the Company disclaims
any such incorporation by reference. Neither the Company nor the Agents have provided or otherwise authorized any other person to provide
investors with information other than that contained or incorporated by reference in this prospectus supplement or accompanying prospectus,
and neither the Company nor the Agents take any responsibility for other information that others may give you. If an investor is provided
with different or inconsistent information, he or she should not rely on it.
TECHNICAL
AND THIRD-PARTY INFORMATION
This
prospectus supplement, as well as the documents incorporated by reference herein, includes market information, industry data and forecasts
obtained from independent industry publications, market research and analyst reports, surveys and other publicly available sources. Although
the Company believes these sources to be generally reliable, market and industry data is subject to interpretation and cannot be verified
with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process
and other limitations and uncertainties inherent in any statistical survey. Accordingly, the accuracy and completeness of this data is
not guaranteed. Actual outcomes may vary materially from those forecast in such reports, surveys or publications, and the prospect for
material variation can be expected to increase as the length of the forecast period increases. The Company has not independently verified
any of the data from third party sources referred to herein nor ascertained the underlying assumptions relied on by such sources.
Except
where otherwise stated, the disclosure herein, and in the documents incorporated by reference hereby, relating to properties underlying
the Company’s interests is based primarily on information publicly disclosed by the owners or operators of such properties, as
is customary for royalty portfolio companies of this nature. Specifically, as a royalty holder, the Company has limited, if any, access
to the properties subject to its interests. The Company generally relies on publicly available information regarding these properties
and related operations and generally has no ability to independently verify such information, and there can be no assurance that such
third-party information is complete and accurate. In addition, such publicly available information may relate to a larger property area
than that covered by the Company’s interests. Additionally, the Company has, and may from time to time, receive operating information
from the owners and operators of these properties, which it is not permitted to disclose to the public.
As
of the date of this prospectus supplement, the Company considers its royalty interest in the McArthur River Project, Waterbury Lake /
Cigar Lake Project and the Roughrider Project (each as described in the Annual Information Form), located in Saskatchewan, Canada as
its material properties for the purposes of NI 43-101. Information contained in this prospectus supplement and the accompanying prospectus
or incorporated by reference herein or therein with respect to each of such projects has been prepared in accordance with the exemption
set forth in section 9.2 of NI 43-101.
Unless
otherwise indicated, the scientific and technical information contained herein or in the documents incorporated by reference regarding
McArthur River has been derived from the technical report titled “McArthur River Operation, Northern Saskatchewan, Canada, National
Instrument 43-101 Technical Report”, with an effective date of December 31, 2018, prepared for Cameco Corporation (“Cameco”),
the Cameco Annual Information Form for the year ended December 31, 2021 (the “Cameco 2021 AIF”) and Cameco’s
other public disclosures, copies of which are available under its profile on SEDAR.
Unless
otherwise indicated, the scientific and technical information contained herein or in the documents incorporated by reference regarding
Waterbury Lake / Cigar Lake has been derived from the technical report titled “Cigar Lake Operation, Northern Saskatchewan,
Canada, National Instrument 43-101 Technical Report”, with an effective date of December 31, 2015, prepared for Cameco, the
Cameco 2021 AIF and Cameco’s other public disclosures, copies of which are available under its profile on SEDAR.
Unless
otherwise indicated, the scientific and technical information contained herein or in the documents incorporated by reference regarding
the Roughrider Project has been derived from the technical report titled “Technical Report on the Roughrider Uranium Deposit
Royalty, Saskatchewan” with an effective date of October 23, 2019, prepared for the Company by Terra Modelling Services Inc.
and authored by Pieter I. Du Plessis, P.Geo., a copy of which is available under the Company’s profile on SEDAR, as well as public
disclosures by Rio Tinto plc.
We
have obtained certain information contained in this prospectus supplement concerning the industries in which we operate from publicly
available information from third party sources. We have not verified the accuracy or completeness of any information contained in such
publicly available information. In addition, we have not determined if any such third party has omitted to disclose any facts, information
or events which may have occurred prior to or subsequent to the date as of which any such information became publicly available or which
may affect the significance or accuracy of any information contained in any such information and summarized herein.
DOCUMENTS
FILED AS PART OF THE REGISTRATION STATEMENT
The
following documents have been, or will be, filed with the SEC as part of the Registration Statement of which this prospectus supplement
forms a part: (1) the Distribution Agreement; (2) the documents listed under “Documents Incorporated by Reference”; (3) the
consent of PricewaterhouseCoopers LLP; (4) the consent of the Company’s Canadian counsel, Sangra Moller LLP; (5) the consent of
the Agents’ Canadian counsel, DLA Piper (Canada) LLP; (6) powers of attorney from certain of the Company’s directors and
officers (included on the signature page to the Registration Statement); and (7) the consents of the “qualified persons”
referred to in this prospectus supplement under the section entitled “Interest of Experts”.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC the Registration Statement on Form F-10 (File No. 333-256822), as amended, under the Securities Act
with respect to the Offered Shares offered under this prospectus supplement. This prospectus supplement, the accompanying prospectus
and the documents incorporated by reference herein and therein, which form a part of the Registration Statement, do not contain all of
the information set forth in the Registration Statement, certain parts of which are contained in the exhibits to the Registration Statement
as permitted by the rules and regulations of the SEC. Information omitted from this prospectus supplement or the prospectus but contained
in the Registration Statement is available on EDGAR under the Company’s profile at www.sec.gov. Reference is also made to the Registration
Statement and the exhibits thereto for further information with respect to us, the Offering and the Offered Shares. Statements contained
in this prospectus supplement as to the contents of certain documents are not necessarily complete and, in each instance, reference is
made to the copy of the document filed as an exhibit to the Registration Statement. Each such statement is qualified in its entirety
by such reference.
We
are required to file with the various securities commissions or similar authorities in all of the provinces and territories of Canada,
annual and quarterly reports, material change reports and other information. We are also an SEC registrant subject to the informational
requirements of the Exchange Act and, accordingly, file with, or furnish to, the SEC certain reports and other information. Under MJDS,
these reports and other information (including financial information) may be prepared in accordance with the disclosure requirements
of Canada, which differ from those of the United States. As a foreign private issuer, we are exempt from the rules under the Exchange
Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from
the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
THE
COMPANY
The
following description of the Company does not contain all of the information about the Company and its assets and business that you should
consider before investing in the Offered Shares. You should carefully read the entire prospectus supplement and the accompanying prospectus,
including the section entitled “Risk Factors”, and the Annual Information Form, as well as the documents incorporated by
reference herein and therein before making an investment decision.
URC
is a uranium royalty company focused on gaining exposure to uranium prices by making strategic investments in uranium interests, including
royalties, streams, debt and equity investments in uranium companies, as well as through holdings of physical uranium. For further information
on the Company and its business activities, see the Annual Information Form, which is incorporated by reference herein.
RISK
FACTORS
An
investment in our common shares involves a high degree of risk. Before deciding whether to invest in our common shares, you should consider
carefully the risks described below, together with other information in this prospectus supplement, the accompanying prospectus, and
the information and documents incorporated by reference herein and therein. An investment in the Offered Shares is subject to certain
risks, including risks related to the business of the Company, risks related to uranium extraction operations and risks related to the
Company’s securities described in this prospectus supplement, the accompanying prospectus and the documents incorporated or deemed
to be incorporated by reference in the prospectus and herein by reference. SEE THE RISK FACTORS BELOW AND THE “RISK FACTORS”
SECTION OF THE PROSPECTUS AND THE DOCUMENTS INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE HEREIN AND THEREIN, INCLUDING THE
AIF. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be seriously
harmed. This could cause the trading price of our common shares to decline, resulting in a loss of all or part of your investment. The
risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties not presently known to us,
or that we currently see as immaterial, may also harm our business. Please also read carefully the section below entitled “Special
Note Regarding Forward-Looking Statements.”
No
certainty regarding the net proceeds to the Company
There
is no certainty that the US$40,000,000 (or the equivalent in Canadian dollars determined using the daily exchange rate posted by the
Bank of Canada on the date the Offered Shares are sold) will be raised under the Offering. The Agents have agreed to use their commercially
reasonable efforts to sell, on the Company’s behalf, the Offered Shares designated by the Company, but the Company is not required
to request the sale of the maximum amount offered or any amount and, if the Company requests a sale, the Agents are not obligated to
purchase any Offered Shares that are not sold. As a result of the Offering being made on a commercially reasonable efforts basis with
no minimum, and only as requested by the Company, the Company may raise substantially less than the maximum total offering amount or
nothing at all.
Discretion
in the use of proceeds
The
Company currently intends to allocate the net proceeds, if any, received from the Offering as described under “Use of Proceeds”;
however, the Company will have discretion in the actual application of such net proceeds, and may elect to allocate net proceeds
differently from that described under “Use of Proceeds” if determined by the board of directors of the Company to be
in the Company’s best interests to do so. Shareholders may not agree with the manner in which the Company’s board of
directors and management choose to allocate and spend the net proceeds. The failure by the Company to apply these funds effectively
could have a material adverse effect on the Company’s business.
Loss
of entire investment
An
investment in the securities of the Company carries a high degree of risk, should be considered speculative by investors and may result
in the loss of an investor’s entire investment. The Company has no history of earnings, a limited business history, has not paid
dividends, and is unlikely to pay dividends in the immediate or near future. The Company’s operations are not sufficiently established
such that it can mitigate the risks associated with the Company’s planned activities.
At-the-Market
Offering
Investors
who purchase Offered Shares in this Offering at different times will likely pay different prices, and so may experience different outcomes
in their investment results. The Company will have discretion, subject to market demand, to vary the timing, prices and numbers of Offered
Shares sold, and there is no minimum or maximum sales price. Investors may experience a decline in the value of their Offered Shares
as a result of common share sales made at prices lower than the prices they paid.
Liquidity
concerns and future financing requirements
The
Company has no source of operating revenue and may require additional financing in order to fund its business plan. The Company’s
ability to arrange such financing in the future will depend in part on prevailing capital market conditions, as well as the Company’s
business success. There can be no assurance that it will be successful in its efforts to arrange additional financing on satisfactory
terms, or at all. If additional financing is raised by the issuance of common shares or securities exchangeable for or convertible into
common shares, control of the Company may change and its shareholders may suffer additional dilution. If adequate funds are not available,
or are not available on acceptable terms, the Company may not be able to operate its businesses at its maximum potential, to expand,
to take advantage of other opportunities or to otherwise remain in business.
The
Company may be treated as a “Passive Foreign Investment Company” under the U.S. Internal Revenue Code, which could result
in adverse U.S. federal income tax consequences for U.S. investors
Prospective
investors who are “U.S. Holders” (as defined below in “Certain United States Federal Income Tax Considerations”)
should be aware that they could be subject to certain adverse U.S. federal income tax consequences if the Company is classified as a
PFIC for U.S. federal income tax purposes. The determination of whether we are a PFIC for a taxable year depends, in part, on the application
of complex U.S. federal income tax rules, which are subject to differing interpretations, and such determination will depend on the composition
of our income, expenses and assets from time to time and the nature of the activities performed by our officers and employees. Although
the Company has not made a formal determination as to whether it was a PFIC for the tax year ended April 30, 2022, and does not plan
to make such a determination for subsequent years, the Company believes there is a significant risk that it was a PFIC for the tax year
ended April 30, 2022, and anticipates that there will be a significant risk that it will be a PFIC in subsequent years. If the Company
is classified as a PFIC in any taxable year in which a U.S. Holder holds Offered Shares, the Company generally will be considered a PFIC
with respect to such Offered Shares in subsequent taxable years even if the Company is otherwise not a PFIC in such subsequent taxable
years. If the Company is considered to be a PFIC with respect to a U.S. Holder’s Offered Shares, such holder generally will be
liable to pay income tax at the highest ordinary income tax rate on any “excess distribution” from the Company and on the
U.S. Holder’s gain from the disposition of Offered Shares as if such excess distribution or gain had been recognized ratably over
the U.S. Holder’s holding period for the Offered Shares, plus interest on such amount as if it were treated as a series of underpayments
of tax in such prior years. Prospective investors who are U.S. Holders should also be aware that, for each tax year, if any, that the
Company is a PFIC, the Company may not satisfy the record-keeping requirements or make available to U.S. Holders a PFIC annual information
statement or any other information such U.S. Holders require to make a “QEF Election” (as defined below in “Certain
United States Federal Income Tax Considerations”) with respect to the Company or any subsidiary that also is classified as a PFIC.
Accordingly, it is expected that U.S. Holders will not be able to make a QEF Election with respect to the Company or its subsidiaries.
Prospective investors who are U.S. Holders should consult their own tax advisors regarding the likelihood and consequences of the Company
being treated as a PFIC for U.S. federal income tax purposes, including the availability, advisability and implications of making tax
elections to mitigate possible adverse U.S. federal income tax consequences but may result in an inclusion in gross income without receipt
of such income.
CONSOLIDATED
CAPITALIZATION
Since
April 30, 2022, the Company has:
|
(a) |
canceled
its foreign exchange credit facility, which facility was initially granted by Toronto-Dominion Bank on March 26, 2020, releasing
restricted cash in the amount of US$0.5 million (C$642,400) held by the bank as security for a foreign exchange facility; |
|
|
|
|
(b) |
drew
down US$3.0 million (C$3,888,990) and repaid US$1.3 million (C$1,710,149) under its BMO Credit Facility; and |
|
|
|
|
(c) |
granted
stock options exercisable into 493,750 common shares. |
As
a result of the Offering, the shareholder’s equity of the Company will increase by the amount of the net proceeds of the Offering
and the number of issued and outstanding common shares will increase by the number of Offered Shares actually distributed under the Offering.
Other
than as set forth above and herein under “Prior Sales”, there have been no material changes in the Company’s share
or loan capital on a consolidated basis since April 30, 2022.
USE
OF PROCEEDS
The
Company intends to use the net proceeds from the Offering, if any, to finance the acquisition of additional royalties, streams, physical
uranium and similar interests and for working capital purposes. The Company has a negative cash flow from operating activities in its
most recently completed financial year, and, if necessary, proceeds may be used to fund negative cash flow from operating activities
in future periods. The Company may, from time to time, issue securities (including equity and debt securities) other than pursuant
to this prospectus supplement.
The
net proceeds from the Offering, if any, are not determinable in light of the nature of the distribution. Sales of Offered Shares, if
any, will be made in transactions that are deemed to be “at-the-market distributions” as defined in NI 44-102, including
sales made by the Agents directly on the TSXV, the Nasdaq Capital Market or any other trading market for the common shares in Canada
or the U.S. Any proceeds that the Company receives will depend on the number of Offered Shares actually sold and the offering price of
such Offered Shares. The net proceeds to the Company of any given distribution of Offered Shares through the Agents in an “at-the-market
distribution” under the Distribution Agreement will represent the gross proceeds of the Offering, after deducting the applicable
Commission, any transaction or filing fees imposed by any governmental, regulatory, or self-regulatory organization in connection with
any such sales of Offered Shares and the expenses of the Offering. The gross proceeds of the Offering will be up to US$40,000,000
(or the equivalent in Canadian dollars determined using the daily exchange rate posted by the Bank of Canada on the date the Offered
Shares are sold). The Agents will receive the Commission of up to 2.50% of the gross proceeds from the sale of the Offered Shares. Any
Commission paid to the Agents will be paid out of the proceeds from the sale of Offered Shares. There is no minimum amount of funds that
must be raised under the Offering. This means that the Offering may terminate after raising only a portion of the Offering amount set
out above, or none at all. See “Plan of Distribution”.
The
expected use of net proceeds of this offering represents our current intentions based upon our present plan and business conditions.
Investors are cautioned, however, that expenditures may vary substantially from these uses. Investors will be relying on the judgment
of our management, who will have broad discretion regarding the application of the proceeds of this Offering. The amounts and timing
of our actual expenditures will depend upon numerous factors, including the amount of cash generated by our operations, the amount of
competition we face and other operational factors. We may find it necessary or advisable to use portions of the proceeds from this Offering
for other purposes. See “Risk Factors”.
Pending
application of the net proceeds as described above, we intend to invest the proceeds to us in investment-grade, interest-bearing securities
such as money market funds, certificates of deposit, or direct or guaranteed obligations of the U.S. or Canadian government, or hold
as cash. We cannot predict whether the proceeds invested will yield a favorable, or any, return.
PLAN
OF DISTRIBUTION
The
Company has entered into the Distribution Agreement with the Agents under which the Company may issue and sell from time to time Offered
Shares having an aggregate sale price of up to US$40,000,000 (or the equivalent in Canadian dollars determined using the daily exchange
rate posted by the Bank of Canada on the date the Offered Shares are sold) in each of the provinces and territories of Canada and in
the United States pursuant to placement notices delivered by the Company to the Agents from time to time in accordance with the terms
of the Distribution Agreement. Sales of Offered Shares, if any, will be made in transactions that are deemed to be “at-the-market
distributions” as defined in NI 44-102, including sales made by the Agents directly on the TSXV, the Nasdaq Capital Market or any
other trading market for the common shares in Canada or the United States. Subject to the pricing parameters in a placement notice, the
Offered Shares will be distributed at the market prices prevailing at the time of the sale. As a result, prices may vary as between purchasers
and during the period of distribution. The Company cannot predict the number of Offered Shares that it may sell under the Distribution
Agreement on the TSXV, the Nasdaq Capital Market or any other trading market for the common shares in Canada or the United States, or
if any Offered Shares will be sold.
The
Agents will offer the Offered Shares subject to the terms and conditions of the Distribution Agreement from time to time as agreed upon
by the Company and the Agents. The Company will designate the maximum amount of Offered Shares to be sold pursuant to any single placement
notice to the applicable Agent or Agents. The Company will identify in the placement notice which Agent or Agents will effect the placement.
Subject to the terms and conditions of the Distribution Agreement, the Agents will use their commercially reasonable efforts to sell,
on the Company’s behalf, all of the Offered Shares requested to be sold by the Company. The Company may instruct the Agents not
to sell Offered Shares if the sales cannot be effected at or above the price designated by the Company in a particular placement notice.
Any placement notice delivered to an applicable Agent or Agents shall be effective upon delivery unless and until (i) the applicable
Agent or Agents declines to accept the terms contained in the placement notice or such Agent or Agents does not promptly confirm the
acceptability of such placement notice, (ii) the entire amount of Offered Shares under the placement notice are sold, (iii) the Company
suspends or terminates the placement notice in accordance with the terms of the Distribution Agreement, (iv) the Company issues a subsequent
placement notice with parameters superseding those of the earlier placement notice, or (v) the Distribution Agreement is terminated in
accordance with its terms. No Agent will be required to purchase Offered Shares as principals pursuant to the Distribution Agreement.
Either
the Company or the Agents may suspend the Offering upon proper notice to the other party. The Company and the Agents each have the right,
by giving written notice as specified in the Distribution Agreement, to terminate the Distribution Agreement in each party’s sole
discretion at any time.
The
Company will pay the Agents the Commission for their services in acting as agents in connection with the sale of Offered Shares pursuant
to the Distribution Agreement. The amount of the Commission will be up to 2.5% of the gross sales price per Offered Share sold; provided,
however, that the Company shall not be obligated to pay the Agents any Commission on any sale of Offered Shares that it is not
possible to settle due to (i) a suspension or material limitation in trading in securities generally on the TSXV or the Nasdaq Capital
Market, (ii) a material disruption in securities settlement or clearance services in the U.S. or Canada, or (iii) failure by the applicable
Agent to comply with its obligations under the terms of the Distribution Agreement. The sales proceeds remaining after payment of the
Commission and after deducting any expenses payable by the Company and any transaction or filing fees imposed by any governmental, regulatory,
or self-regulatory organization in connection with the sales, will equal the net proceeds to the Company from the sale of any such Offered
Shares.
The
applicable Agent or Agents will provide written confirmation to the Company following close of trading on the trading day on which such
Agent has made sales of the Offered Shares under the Distribution Agreement setting forth (i) the number of Offered Shares sold on such
day (including the number of Offered Shares sold on the TSXV, on the Nasdaq Capital Market or on any other marketplace in Canada or the
United States), (ii) the average price of the Offered Shares sold on such day (including the average price of Offered Shares sold on
the TSXV, on the Nasdaq Capital Market or on any other marketplace in Canada or the United States), (iii) the gross proceeds, (iv) the
Commission payable by the Company to the Agents with respect to such sales, and (v) the net proceeds payable to the Company.
The
Company will disclose the number and average price of the Offered Shares sold under this prospectus supplement, as well as the gross
proceeds, Commission and net proceeds from sales hereunder in the Company’s annual and interim financial statements and related
management’s discussion and analysis, annual information forms and Annual Reports on Form 40-F, filed on www.sedar.com and with
the SEC on EDGAR at www.sec.gov, for any quarters or annual periods in which sales of Offered Shares occur.
Settlement
for sales of Offered Shares will occur, unless the parties agree otherwise, on the second trading day on the applicable exchange following
the date on which any sales were made in return for payment of the gross proceeds (less Commission) to the Company. There is no arrangement
for funds to be received in an escrow, trust or similar arrangement. Sales of Offered Shares in the United States will be settled through
the facilities of The Depository Trust Corporation or by such other means as the Company and the Agents may agree upon and sales of Offered
Shares in Canada will be settled through the facilities of The Canadian Depository for Securities or by such other means as the Company
and the Agents may agree.
The
Canadian Agents are not registered as broker-dealers in the United States and, accordingly, will only sell Offered Shares on marketplaces
in Canada, and the U.S. Agents are not registered as investment dealers in any Canadian jurisdiction and, accordingly, will only sell
Offered Shares on marketplaces in the United States.
In
connection with the sales of the Offered Shares on the Company’s behalf, each of the Agents may be deemed to be an “underwriter”
within the meaning of the Securities Act, and the compensation paid to the Agents may be deemed to be underwriting commissions or discounts.
The Company has agreed in the Distribution Agreement to provide indemnification and contribution to the Agents against certain liabilities,
including liabilities under the Securities Act and under Canadian securities laws. In addition, the Company has agreed to pay the reasonable
expenses of the Agents in connection with the Offering, pursuant to the terms of the Distribution Agreement.
The
Agents and their affiliates will not engage in any transactions to stabilize or maintain the price of the Offered Shares in connection
with any offer or sales of Offered Shares pursuant to the Distribution Agreement. No underwriter of the at-the-market distribution, including
the Agents, and no person or company acting jointly or in concert with an underwriter, may, in connection with the distribution, enter
into any transaction that is intended to stabilize or maintain the market price of the securities or securities of the same class as
the securities distributed under this prospectus supplement and the related prospectus, including selling an aggregate number or principal
amount of securities that would result in the underwriter creating an over-allocation position in the securities.
The
total expenses related to the commencement of the Offering to be paid by the Company, excluding the Commission payable to the Agents
under the Distribution Agreement, are estimated to be approximately C$350,000.
Pursuant
to the Distribution Agreement, the Offering will terminate upon the earliest of (i) July 14, 2023, (ii) the issuance and sale of all
of the Offered Shares subject to the Distribution Agreement, and (iii) the termination of the Distribution Agreement as permitted therein.
The
Agents and their affiliates may in the future provide various investment banking, commercial banking and other financial services for
the Company and its affiliates, for which services they may in the future receive customary fees. To the extent required by Regulation
M under the Exchange Act, the Agents will not engage in any market making activities involving the common shares while the Offering is
ongoing under this prospectus supplement.
Bank
of Montreal, an affiliate of BMO Nesbitt Burns Inc. and BMO Capital Markets Corp., is the lender under the BMO Margin Loan Agreement.
The Company may repay the BMO Credit Facility, from time to time, in accordance with the terms of the BMO Margin Loan Agreement, using
net proceeds of the Offering. Further, the Company has in place the TD Term Loan with Toronto Dominion Bank, an affiliate of TD Securities
Inc. and TD Securities (USA) LLC, Agents under the Offering. Consequently, the Company may be considered a “connected issuer”
of BMO Nesbitt Burns Inc. and TD Securities Inc. under applicable securities laws, and a “conflict of interest” may be deemed
to exist under FINRA Rule 5121(f)(5)(C)(i) if five percent of the net offering proceeds, not including the Agent’s compensation,
are intended to be used to reduce or retire the balance of either of those loans. However, the Company does not expect to use five percent
or more of the net offering proceeds to reduce or retire the loans.
The
common shares of the Company are listed on the TSXV and the Nasdaq Capital Market. The TSXV has conditionally approved the listing of
the Offered Shares distributed under the Offering, subject to the Company fulfilling all of the requirements of the TSXV. The Company
has submitted a Listing of Additional Shares Notification form for the Offered Shares to the Nasdaq Stock Market.
DESCRIPTION
OF SHARE CAPITAL
The
Company is authorized to issue an unlimited number of common shares without par value. As of September 1, 2022, there were 97,275,678
common shares issued and outstanding.
In
addition, as of September 1, 2022, there were 1,248,750 common shares issuable upon the exercise of outstanding stock options, at a weighted
average exercise price of C$3.50.
Holders
of common shares are entitled to receive notice of any meetings of shareholders of the Company, to attend and to cast one vote per common
share at all such meetings. Holders of common shares do not have cumulative voting rights with respect to the election of directors and,
accordingly, holders of a majority of the common shares entitled to vote in any election of directors may elect all directors standing
for election. Holders of common shares are entitled to receive on a pro rata basis such dividends, if any, as and when declared by the
Company’s board of directors at its discretion from funds legally available therefor and upon the liquidation, dissolution or winding
up of the Company are entitled to receive on a pro rata basis the net assets of the Company after payment of debts and other liabilities.
The common shares do not carry any pre-emptive, subscription, redemption or conversion rights, nor do they contain any sinking or purchase
fund provisions.
PRIOR
SALES
During
the 12-month period before the date of this prospectus supplement, the Company has issued the following common shares and securities
convertible into common shares.
Date
of Issuance | |
Type
of Security | |
Number
Issued | | |
Issuance
Price (C$) | |
| |
| |
| | |
| |
September 2,
2021 | |
Common Shares | |
| 35,200 | | |
$ | 2.00 | (1) |
September 3, 2021 | |
Common Shares | |
| 78,988 | | |
$ | 2.00 | (1) |
September 10, 2021 | |
Common Shares | |
| 18,167 | | |
$ | 2.00 | (1) |
September 13, 2021 | |
Common Shares | |
| 31,400 | | |
$ | 2.00 | (1) |
September 14, 2021 | |
Common Shares | |
| 661,556 | | |
$ | 2.00 | (1) |
September 15, 2021 | |
Common Shares | |
| 361,432 | | |
$ | 2.00 | (1) |
September 15, 2021 | |
Stock Options | |
| 43,950 | | |
| N/A | |
September 16, 2021 | |
Common Shares | |
| 842,910 | | |
$ | 2.00 | (1) |
September 17, 2021 | |
Common Shares | |
| 258,312 | | |
$ | 2.00 | (1) |
September 20, 2021 | |
Common Shares | |
| 461,326 | | |
$ | 2.00 | (1) |
September 21, 2021 | |
Common Shares | |
| 591,700 | | |
$ | 2.00 | (1) |
September 22, 2021 | |
Common Shares | |
| 304,200 | | |
$ | 2.00 | (1) |
September 23, 2021 | |
Common Shares | |
| 18,600 | | |
$ | 2.00 | (1) |
September 24, 2021 | |
Common Shares | |
| 35,932 | | |
$ | 2.00 | (1) |
September 27, 2021 | |
Common Shares | |
| 20,000 | | |
$ | 2.00 | (1) |
September 28, 2021 | |
Common Shares | |
| 50,500 | | |
$ | 2.00 | (1) |
September 30, 2021 | |
Common Shares | |
| 26,100 | | |
$ | 2.00 | (1) |
October 4, 2021 | |
Common Shares | |
| 32,200 | | |
US$ | 4.08 | (3) |
October 6, 2021 | |
Common Shares | |
| 7,500 | | |
$ | 2.00 | (1) |
October 6, 2021 | |
Common Shares | |
| 25,300 | | |
$ | 5.23 | (3) |
October 6, 2021 | |
Common Shares | |
| 60,000 | | |
US$ | 4.19 | (3) |
October 7, 2021 | |
Common Shares | |
| 7,000 | | |
$ | 5.04 | (3) |
October 7, 2021 | |
Common Shares | |
| 9,500 | | |
US$ | 4.06 | (3) |
October 8, 2021 | |
Common Shares | |
| 60,650 | | |
$ | 2.00 | (1) |
October 12, 2021 | |
Common Shares | |
| 13,500 | | |
$ | 5.07 | (3) |
October 12, 2021 | |
Common Shares | |
| 80,515 | | |
US$ | 3.95 | (3) |
October 13, 2021 | |
Common Shares | |
| 300 | | |
$ | 5.10 | (3) |
October 13, 2021 | |
Common Shares | |
| 1,700 | | |
$ | 2.00 | (1) |
October 13, 2021 | |
Common Shares | |
| 4,851 | | |
US$ | 4.14 | (3) |
October 13, 2021 | |
Common Shares | |
| 103,587 | | |
US$ | 4.07 | (3) |
October 14, 2021 | |
Common Shares | |
| 5,000 | | |
$ | 3.49 | (2) |
October 14, 2021 | |
Common Shares | |
| 187,505 | | |
$ | 2.00 | (1) |
October 14, 2021 | |
Common Shares | |
| 230,000 | | |
$ | 5.66 | (3) |
October 14, 2021 | |
Common Shares | |
| 645,000 | | |
US$ | 4.48 | (3) |
October 15, 2021 | |
Common Shares | |
| 167,900 | | |
$ | 2.00 | (1) |
October 15, 2021 | |
Common Shares | |
| 152,200 | | |
$ | 6.00 | (3) |
October 15, 2021 | |
Common Shares | |
| 330,000 | | |
US$ | 4.82 | (3) |
October 18, 2021 | |
Common Shares | |
| 153,200 | | |
$ | 2.00 | (1) |
October 18, 2021 | |
Common Shares | |
| 83,619 | | |
US$ | 4.72 | (3) |
October 19, 2021 | |
Common Shares | |
| 290,100 | | |
$ | 2.00 | (1) |
October 19, 2021 | |
Common Shares | |
| 70,117 | | |
US$ | 4.61 | (3) |
October 20, 2021 | |
Common Shares | |
| 100,000 | | |
US$ | 5.05 | (3) |
October 21, 2021 | |
Common Shares | |
| 19,300 | | |
$ | 2.00 | (1) |
October 21, 2021 | |
Common Shares | |
| 68,450 | | |
US$ | 5.12 | (3) |
October 22, 2021 | |
Common Shares | |
| 76,200 | | |
$ | 2.00 | (1) |
October 22, 2021 | |
Common Shares | |
| 225,100 | | |
US$ | 5.45 | (3) |
October 26, 2021 | |
Common Shares | |
| 156,067 | | |
$ | 2.00 | (1) |
October 27, 2021 | |
Common Shares | |
| 208,429 | | |
$ | 2.00 | (1) |
October 27, 2021 | |
Common Shares | |
| 110,295 | | |
$ | 1.40 | (1) |
October 27, 2021 | |
Common Shares | |
| 16,100 | | |
US$ | 5.81 | (3) |
October 28, 2021 | |
Common Shares | |
| 34,008 | | |
$ | 2.00 | (1) |
October 29, 2021 | |
Common Shares | |
| 40,300 | | |
$ | 2.00 | (1) |
November 1, 2021 | |
Common Shares | |
| 117,458 | | |
$ | 2.00 | (1) |
November 2, 2021 | |
Common Shares | |
| 63,250 | | |
$ | 2.00 | (1) |
November 3,
2021 | |
Common Shares | |
| 21,280 | | |
$ | 2.00 | (1) |
November 3, 2021 | |
Common Shares | |
| 64,380 | | |
US$ | 5.09 | (3) |
November 4, 2021 | |
Common Shares | |
| 35,616 | | |
$ | 2.00 | (1) |
November 5, 2021 | |
Common Shares | |
| 200,000 | | |
US$ | 5.37 | (3) |
November 8, 2021 | |
Common Shares | |
| 92,350 | | |
$ | 2.00 | (1) |
November 8, 2021 | |
Common Shares | |
| 10.500 | | |
US$ | 5.55 | (3) |
November 9, 2021 | |
Common Shares | |
| 54,600 | | |
$ | 2.00 | (1) |
November 10, 2021 | |
Common Shares | |
| 4,000 | | |
$ | 2.00 | (1) |
November 10, 2021 | |
Common Shares | |
| 100,000 | | |
US$ | 5.51 | (3) |
November 14, 2021 | |
Common Shares | |
| 4,272 | | |
US$ | 5.58 | (3) |
November 15, 2021 | |
Common Shares | |
| 28,699 | | |
$ | 2.00 | (1) |
November 15, 2021 | |
Common Shares | |
| 40,000 | | |
US$ | 5.76 | (3) |
November 15, 2021 | |
Common Shares | |
| 44,000 | | |
US$ | 5.67 | (3) |
November 16, 2021 | |
Common Shares | |
| 11,685 | | |
$ | 2.00 | (1) |
November 17, 2021 | |
Common Shares | |
| 1,296 | | |
$ | 2.00 | (1) |
November 18, 2021 | |
Common Shares | |
| 7,820 | | |
$ | 2.00 | (1) |
November 19, 2021 | |
Common Shares | |
| 39,200 | | |
$ | 2.00 | (1) |
November 22, 2021 | |
Common Shares | |
| 38,300 | | |
$ | 2.00 | (1) |
November 22, 2021 | |
Common Shares | |
| 3,300 | | |
US$ | 5.25 | (3) |
November 23, 2021 | |
Common Shares | |
| 1,900 | | |
$ | 2.00 | (1) |
November 24, 2021 | |
Common Shares | |
| 15,800 | | |
$ | 2.00 | (1) |
November 25, 2021 | |
Common Shares | |
| 91,700 | | |
$ | 2.00 | (1) |
November 25, 2021 | |
Common Shares | |
| 8,400 | | |
$ | 6.02 | (3) |
November 26, 2021 | |
Common Shares | |
| 22,112 | | |
US$ | 4.75 | (3) |
November 29, 2021 | |
Common Shares | |
| 100,000 | | |
US$ | 4.80 | (3) |
November 30, 2021 | |
Common Shares | |
| 58,517 | | |
$ | 2.00 | (1) |
December 1, 2021 | |
Common Shares | |
| 167 | | |
US$ | 4.69 | (3) |
December 3, 2021 | |
Common Shares | |
| 2,752 | | |
US$ | 4.35 | (3) |
December 6, 2021 | |
Common Shares | |
| 10,400 | | |
$ | 2.00 | (1) |
December 7, 2021 | |
Common Shares | |
| 12,200 | | |
$ | 2.00 | (1) |
December 14, 2021 | |
Common Shares | |
| 16,200 | | |
$ | 2.00 | (1) |
December 15, 2021 | |
Common Shares | |
| 25,000 | | |
$ | 2.00 | (1) |
December 16, 2021 | |
Common Shares | |
| 1,700 | | |
$ | 2.00 | (1) |
December 17, 2021 | |
Common Shares | |
| 1,394 | | |
$ | 2.00 | (1) |
December 20, 2021 | |
Common Shares | |
| 6,600 | | |
$ | 2.00 | (1) |
December 23, 2021 | |
Common Shares | |
| 4,200 | | |
$ | 2.00 | (1) |
December 23, 2021 | |
Common Shares | |
| 20,713 | | |
US$ | 3.81 | (3) |
December 28, 2021 | |
Common Shares | |
| 130,000 | | |
US$ | 4.02 | (3) |
December 29, 2021 | |
Common Shares | |
| 50,000 | | |
US$ | 3.86 | (3) |
December 30, 2021 | |
Common Shares | |
| 10,000 | | |
US$ | 4.07 | (3) |
December 31, 2021 | |
Common Shares | |
| 4,443 | | |
$ | 2.00 | (1) |
January 5, 2022 | |
Common Shares | |
| 33,000 | | |
US$ | 4.08 | (3) |
January 6, 2022 | |
Common Shares | |
| 15,500 | | |
US$ | 4.01 | (3) |
January 7, 2022 | |
Common Shares | |
| 181,500 | | |
US$ | 4.25 | (3) |
January 7, 2022 | |
Common Shares | |
| 55,000 | | |
$ | 5.35 | (3) |
January 10, 2022 | |
Common Shares | |
| 7,500 | | |
US$ | 4.16 | (3) |
January 11, 2022 | |
Common Shares | |
| 15,000 | | |
$ | 5.08 | (3) |
January 11, 2022 | |
Common Shares | |
| 40,000 | | |
US$ | 4.04 | (3) |
January 13, 2022 | |
Stock Options | |
| 5,000 | | |
| N/A | |
January 14, 2022 | |
Common Shares | |
| 37,500 | | |
$ | 3.49 | (2) |
January 14, 2022 | |
Common Shares | |
| 41,420 | | |
US$ | 4.03 | (3) |
January 25, 2022 | |
Common Shares | |
| 3,358 | | |
$ | 2.00 | (1) |
February 7, 2022 | |
Common Shares | |
| 12,500 | | |
$ | 3.49 | (2) |
February 11, 2022 | |
Common Shares | |
| 29,300 | | |
US$ | 3.58 | (3) |
February 14, 2022 | |
Common Shares | |
| 30,100 | | |
US$ | 3.75 | (3) |
February 16, 2022 | |
Common Shares | |
| 2,300 | | |
$ | 2.00 | (1) |
February 17, 2022 | |
Common Shares | |
| 30,000 | | |
US$ | 3.39 | (3) |
February 24, 2022 | |
Common Shares | |
| 25,000 | | |
US$ | 3.17 | (3) |
February 25, 2022 | |
Common Shares | |
| 32,000 | | |
US$ | 3.25 | (3) |
February 28, 2022 | |
Common Shares | |
| 17,500 | | |
$ | 3.49 | (2) |
February 28, 2022 | |
Common Shares | |
| 24,000 | | |
$ | 2.00 | (1) |
February 28, 2022 | |
Common Shares | |
| 100,000 | | |
US$ | 3.33 | (3) |
March 1, 2022 | |
Common Shares | |
| 95,000 | | |
US$ | 3.56 | (3) |
March 2, 2022 | |
Common Shares | |
| 42,500 | | |
$ | 3.49 | (2) |
March 2, 2022 | |
Common Shares | |
| 174,083 | | |
US$ | 4.04 | (3) |
March 3, 2022 | |
Common Shares | |
| 85,000 | | |
US$ | 4.26 | (3) |
March 4, 2022 | |
Common Shares | |
| 305,000 | | |
US$ | 4.59 | (3) |
March 8, 2022 | |
Common Shares | |
| 20,000 | | |
$ | 2.00 | (1) |
March 9, 2022 | |
Common Shares | |
| 100,000 | | |
US$ | 4.44 | (3) |
March 10, 2022 | |
Common Shares | |
| 86,300 | | |
$ | 5.63 | (3) |
March 10, 2022 | |
Common Shares | |
| 135,000 | | |
US$ | 4.40 | (3) |
March 11, 2022 | |
Common Shares | |
| 72,600 | | |
$ | 6.02 | (3) |
March 11, 2022 | |
Common Shares | |
| 146,000 | | |
US$ | 4.73 | (3) |
March 14, 2022 | |
Common Shares | |
| 21,200 | | |
$ | 6.10 | (3) |
March 14, 2022 | |
Common Shares | |
| 90,000 | | |
US$ | 4.75 | (3) |
March 18, 2022 | |
Common Shares | |
| 300 | | |
$ | 5.50 | (3) |
March 18, 2022 | |
Common Shares | |
| 3,600 | | |
US$ | 4.32 | (3) |
March 21, 2022 | |
Common Shares | |
| 40,400 | | |
$ | 2.00 | (1) |
March 21, 2022 | |
Common Shares | |
| 50,000 | | |
$ | 5.61 | (3) |
March 21, 2022 | |
Common Shares | |
| 100,000 | | |
US$ | 4.42 | (3) |
March 22, 2022 | |
Common Shares | |
| 5,096 | | |
$ | 2.00 | (1) |
March 23, 2022 | |
Common Shares | |
| 12,200 | | |
$ | 6.09 | (3) |
March 23, 2022 | |
Common Shares | |
| 41,471 | | |
US$ | 4.85 | (3) |
March 30, 2022 | |
Common Shares | |
| 668 | | |
$ | 2.00 | (1) |
April 1, 2022 | |
Common Shares | |
| 12,300 | | |
$ | 5.02 | (3) |
April 1, 2022 | |
Common Shares | |
| 20,000 | | |
US$ | 4.02 | (3) |
April 5, 2022 | |
Common Shares | |
| 30,100 | | |
US$ | 4.10 | (3) |
April 7, 2022 | |
Common Shares | |
| 20,100 | | |
| 5.21 | (3) |
April 7, 2022 | |
Common Shares | |
| 41,262 | | |
US$ | 4.17 | (3) |
April 11, 2022 | |
Common Shares | |
| 4,000 | | |
$ | 2.00 | (1) |
April 11, 2022 | |
Common Shares | |
| 70,000 | | |
$ | 5.36 | (3) |
April 11, 2022 | |
Common Shares | |
| 136,300 | | |
US$ | 4.27 | (3) |
April 12, 2022 | |
Common Shares | |
| 41,000 | | |
$ | 5.63 | (3) |
April 12, 2022 | |
Common Shares | |
| 85,200 | | |
US$ | 4.44 | (3) |
April 13, 2022 | |
Common Shares | |
| 31,000 | | |
$ | 5.55 | (3) |
April 13, 2022 | |
Common Shares | |
| 55,000 | | |
US$ | 4.43 | (3) |
April 14, 2022 | |
Common Shares | |
| 2,900 | | |
$ | 5.74 | (3) |
April 14, 2022 | |
Common Shares | |
| 20,100 | | |
US$ | 4.51 | (3) |
April 18, 2022 | |
Common Shares | |
| 26,400 | | |
$ | 5.67 | (3) |
April 18, 2022 | |
Common Shares | |
| 45,000 | | |
US$ | 4.49 | (3) |
April 20, 2022 | |
Common Shares | |
| 1,780 | | |
$ | 2.00 | (1) |
April 22, 2022 | |
Common Shares | |
| 46,300 | | |
$ | 5.14 | (3) |
April 22, 2022 | |
Common Shares | |
| 71,800 | | |
US$ | 4.10 | (3) |
May 13, 2022 | |
Stock Options | |
| 443,750 | | |
| N/A | |
May 17, 2022 | |
Common Shares | |
| 30,000 | | |
$ | 3.69 | (3) |
May 17, 2022 | |
Common Shares | |
| 52,562 | | |
US$ | 2.85 | (3) |
May 19, 2022 | |
Common Shares | |
| 21,000 | | |
$ | 3.70 | (3) |
May 19, 2022 | |
Common Shares | |
| 36,100 | | |
US$ | 2.88 | (3) |
May 27, 2022 | |
Common Shares | |
| 7,900 | | |
$ | 3.57 | (3) |
May 27, 2022 | |
Common Shares | |
| 45,000 | | |
US$ | 2.77 | (3) |
May 30, 2022 | |
Common Shares | |
| 25,000 | | |
$ | 3.72 | (3) |
May 31, 2022 | |
Common Shares | |
| 50,000 | | |
US$ | 2.90 | (3) |
June 6, 2022 | |
Common Shares | |
| 31,200 | | |
$ | 3.96 | (3) |
June 6, 2022 | |
Common Shares | |
| 30,000 | | |
US$ | 3.14 | (3) |
June 9, 2022 | |
Common Shares | |
| 55,000 | | |
$ | 3.95 | (3) |
June 9, 2022 | |
Common Shares | |
| 190,000 | | |
US$ | 3.16 | (3) |
June 10, 2022 | |
Common Shares | |
| 90,000 | | |
US$ | 3.43 | (3) |
June 20, 2022 | |
Stock Options | |
| 25,000 | | |
| N/A | |
June 23, 2022 | |
Common Shares | |
| 9,700 | | |
$ | 3.42 | (3) |
June 23, 2022 | |
Common Shares | |
| 40,000 | | |
US$ | 2.62 | (3) |
June 28, 2022 | |
Common Shares | |
| 27,500 | | |
$ | 3.33 | (3) |
June 28, 2022 | |
Common Shares | |
| 50,000 | | |
US$ | 2.56 | (3) |
June 29, 2022 | |
Common Shares | |
| 10,000 | | |
$ | 3.37 | (3) |
June 29, 2022 | |
Common Shares | |
| 28,000 | | |
US$ | 2.62 | (3) |
June 30, 2022 | |
Common Shares | |
| 2,681 | | |
US$ | 2.61 | (3) |
July 7, 2022 | |
Stock Options | |
| 25,000 | | |
| N/A | |
July 11, 2022 | |
Common Shares | |
| 18,000 | | |
$ | 3.05 | (3) |
July 11, 2022 | |
Common Shares | |
| 31,000 | | |
US$ | 2.35 | (3) |
July 20, 2022 | |
Common Shares | |
| 26,725 | | |
US$ | 2.34 | (3) |
July 21, 2022 | |
Common Shares | |
| 61,600 | | |
US$ | 2.40 | (3) |
July 22, 2022 | |
Common Shares | |
| 62,585 | | |
US$ | 2.53 | (3) |
July 27, 2022 | |
Common Shares | |
| 30,695 | | |
US$ | 2.33 | (3) |
August 3, 2022 | |
Common Shares | |
| 8,500 | | |
$ | 3.75 | (3) |
August 3, 2022 | |
Common Shares | |
| 35,000 | | |
US$ | 2.93 | (3) |
August 10, 2022 | |
Common Shares | |
| 17,000 | | |
US$ | 2.98 | (3) |
August 25, 2022 | |
Common Shares | |
| 7,500 | | |
$ | 3.19 | (3) |
August 25, 2022 | |
Common Shares | |
| 18,456 | | |
US$ | 2.49 | (3) |
August 26, 2022 | |
Common Shares | |
| 66,500 | | |
$ | 3.61 | (3) |
August 26, 2022 | |
Common Shares | |
| 247,300 | | |
US$ | 2.78 | (3) |
August 29, 2022 | |
Common Shares | |
| 1,200 | | |
$ | 3.89 | (3) |
August 29, 2022 | |
Common Shares | |
| 23,660 | | |
US$ | 3.01 | (3) |
August 31, 2022 | |
Common Shares | |
| 54,500 | | |
$ | 3.99 | (3) |
August 31, 2022 | |
Common Shares | |
| 145,000 | | |
US$ | 3.05 | (3) |
September 1, 2022 | |
Common Shares | |
| 2,500 | | |
$ | 4.15 | (3) |
September 1, 2022 | |
Common Shares | |
| 40,000 | | |
US$ | 3.23 | (3) |
(1) |
Common
shares issued from the exercise of common share purchase warrants. |
(2) |
Common
shares issued from the exercise of stock options. |
(3) |
Common
shares issued from distributions under the Company’s “at-the-market” distribution
equity program qualified by a prospectus supplement dated August 18, 2021 to the Company’s
base shelf prospectus dated June 16, 2021, pursuant to an equity distribution agreement dated
August 18, 2021 among the Company and the Agents. Common shares sold with an Issue Price
in “US$” were sold through the facilities of the Nasdaq Capital Market. Common
Shares sold with an Issue Price in “$” were sold through the facilities of the
TSXV.
|
TRADING
PRICE AND VOLUME
The
common shares of the Company are listed and posted for trading on the TSXV under the symbol “URC” and on the Nasdaq Capital
Market under the symbol “UROY”. The following table sets forth information relating to the trading of the common shares on
the TSXV for the 12-month period prior to the date of this prospectus supplement.
| |
Trading Summary | |
| |
High (C$) | | |
Low (C$) | | |
Volume Traded (#) | |
2021 | |
| | | |
| | | |
| | |
September | |
| 7.11 | | |
| 3.54 | | |
| 10,030,564 | |
October | |
| 7.31 | | |
| 4.57 | | |
| 4,576,497 | |
November | |
| 7.22 | | |
| 5.22 | | |
| 3,482,949 | |
December | |
| 5.60 | | |
| 4.40 | | |
| 3,301,050 | |
2022 | |
| | | |
| | | |
| | |
January | |
| 5.68 | | |
| 3.32 | | |
| 4,020,581 | |
February | |
| 5.35 | | |
| 3.70 | | |
| 3,013,326 | |
March | |
| 6.35 | | |
| 4.65 | | |
| 7,638,672 | |
April | |
| 5.82 | | |
| 4.22 | | |
| 3,770,898 | |
May | |
| 4.52 | | |
| 3.12 | | |
| 2,843,530 | |
June | |
| 4.45 | | |
| 2.85 | | |
| 2,172,887 | |
July | |
| 3.87 | | |
| 2.76 | | |
| 1,823,627 | |
August | |
| 4.34 | | |
| 3.00 | | |
| 1,909,565 | |
The
following table provides the monthly high and low sales price and trading volume of the common shares on the Nasdaq Capital Market for
the 12-month period before the date of this prospectus supplement:
| |
Trading Summary | |
| |
High (US$) | | |
Low (US$) | | |
Volume Traded (#) | |
2021 | |
| | | |
| | | |
| | |
September | |
| 5.60 | | |
| 2.82 | | |
| 34,084,628 | |
October | |
| 5.95 | | |
| 3.61 | | |
| 27,459,366 | |
November | |
| 5.83 | | |
| 4.07 | | |
| 17,040,596 | |
December | |
| 4.45 | | |
| 3.42 | | |
| 12,861,628 | |
2022 | |
| | | |
| | | |
| | |
January | |
| 4.45 | | |
| 2.62 | | |
| 14,057,439 | |
February | |
| 4.23 | | |
| 2.92 | | |
| 8,263,070 | |
March | |
| 5.00 | | |
| 3.72 | | |
| 21,007,228 | |
April | |
| 4.60 | | |
| 3.29 | | |
| 15,011,827 | |
May | |
| 3.53 | | |
| 2.40 | | |
| 11,282,154 | |
June | |
| 3.57 | | |
| 2.21 | | |
| 10,207,187 | |
July | |
| 3.03 | | |
| 2.10 | | |
| 7,267,077 | |
August | |
| 3.30 | | |
| 2.32 | | |
| 10,739,502 | |
The
Company’s warrants are listed on the TSXV under the stock symbol “URC.WT”. The following table provides the monthly
high and low sales price and trading volume of the warrants on the TSXV for the 12-month period before the date of this prospectus supplement:
| |
Trading Summary | |
| |
High (C$) | | |
Low (C$) | | |
Volume Traded (#) | |
2021 | |
| | | |
| | | |
| | |
September | |
| 5.10 | | |
| 1.59 | | |
| 3,829,121 | |
October | |
| 5.25 | | |
| 2.62 | | |
| 1,166,793 | |
November | |
| 5.20 | | |
| 3.28 | | |
| 844,154 | |
December | |
| 3.60 | | |
| 2.50 | | |
| 723,908 | |
2022 | |
| | | |
| | | |
| | |
January | |
| 3.65 | | |
| 2.00 | | |
| 477,230 | |
February | |
| 3.40 | | |
| 2.20 | | |
| 252,768 | |
March | |
| 4.32 | | |
| 2.69 | | |
| 565,664 | |
April | |
| 3.79 | | |
| 2.34 | | |
| 452,143 | |
May | |
| 2.50 | | |
| 1.30 | | |
| 424,960 | |
June | |
| 2.45 | | |
| 1.30 | | |
| 162,882 | |
July | |
| 1.95 | | |
| 1.40 | | |
| 595,828 | |
August | |
| 2.33 | | |
| 1.50 | | |
| 1,701,164 | |
CERTAIN
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In
the opinion of Sangra Moller LLP, Canadian counsel to the Company, and DLA Piper (Canada) LLP, Canadian counsel to the Agents, the following
is, as of the date hereof, a general summary of the principal Canadian federal income tax considerations under the Income Tax Act (Canada)
(the “Tax Act”) and the regulations thereunder (the “Regulations”) and any proposals
to amend the Tax Act or the Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof
(the “Tax Proposals”) generally applicable to a holder who acquires Offered Shares as beneficial owner pursuant
to the Offering and who, at all relevant times, for the purposes of the Tax Act, deals at arm’s length with the Company and the
Agents, is not affiliated with the Company or the Agents, and will acquire and hold such Offered Shares as capital property (each, a
“Holder”), all within the meaning of the Tax Act. Offered Shares will generally be considered to be capital
property to a Holder unless the Holder holds or uses the Offered Shares or is deemed to hold or use the Offered Shares in the course
of carrying on a business of trading or dealing in securities or has acquired them or deemed to have acquired them in a transaction or
transactions considered to be an adventure or concern in the nature of trade.
This
summary does not apply to a Holder (a) that is a “financial institution” for purposes of the “mark-to-market property”
rules in the Tax Act; (b) an interest in which is or would constitute a “tax shelter investment” (as defined in the Tax Act);
(c) that is a “specified financial institution” (as defined in the Tax Act); (d) that reports its “Canadian tax results”
for purposes of the Tax Act, in a currency other than Canadian currency; (e) that is exempt from tax under Part I of the Tax Act; (f)
that has entered into, or will enter into, a “synthetic disposition arrangement” or a “derivative forward agreement”
(as those terms are defined in the Tax Act) with respect to the Offered Shares; (g) that receives dividends on the Offered Shares under
or as part of a “dividend rental arrangement” as defined in the Tax Act, (h) that is a partnership, (i) that is a “substantive
CCPC” as defined in the Tax Proposals; or (j) that is a corporation resident in Canada that is, or becomes, as part of a transaction
or event or series of transactions or events that includes the acquisition of Offered Shares, controlled by a non-resident person or
a group of persons comprised of any combination of non-resident corporations, non-resident individuals or non-resident trusts that do
not deal with each other at arm’s length, for the purposes of the “foreign affiliate dumping” rules in Section 212.3
of the Tax Act. Any such Holders should consult their own tax advisors to determine the particular Canadian federal income tax consequences
to them of acquiring Offered Shares pursuant to the Offering.
This
summary does not address the deductibility of interest by a Holder who has borrowed money or otherwise incurred debt in connection with
the acquisition of Offered Shares.
This
summary is based upon the current provisions of the Tax Act in force as of the date hereof, the Tax Proposals, the current provisions
of the Canada-United States Tax Convention (1980), as amended (the “Canada-U.S. Tax Convention”), and
counsel’s understanding of the current published administrative policies and assessing practices of the Canada Revenue Agency (the
“CRA”). This summary assumes that the Tax Proposals will be enacted in the form proposed and does not take
into account or anticipate any other changes in law, whether by way of judicial, legislative or governmental decision or action, nor
does it take into account provincial, territorial or foreign income tax legislation or considerations, which may differ from the Canadian
federal income tax considerations discussed herein. No assurances can be given that the Tax Proposals will be enacted as proposed or
at all, or that legislative, judicial or administrative changes will not modify or change the statements expressed herein.
This
summary is not exhaustive of all possible Canadian federal income tax considerations applicable to an investment in Offered Shares. This
summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular
Holder. Holders should consult their own tax advisors with respect to the tax consequences applicable to them based on their own particular
circumstances.
Currency
Conversion
Subject
to certain exceptions that are not discussed in this summary, for the purposes of the Tax Act, all amounts relating to the acquisition,
holding or disposition of Offered Shares must be determined in Canadian dollars based on the Bank of Canada rate for the day on which
such amount arose or such other rate as is acceptable to the CRA.
Residents
of Canada
The
following portion of this summary is generally applicable to a Holder who, for the purposes of the Tax Act, is resident or deemed to
be resident in Canada at all relevant times (each, a “Resident Holder”). Certain Resident Holders whose Offered
Shares might not otherwise qualify as capital property may be entitled to make an irrevocable election pursuant to subsection 39(4) of
the Tax Act to have the Offered Shares, and every other “Canadian security” (as defined by the Tax Act) owned by such Resident
Holder in the taxation year of the election and in all subsequent taxation years, deemed to be capital property. Resident Holders should
consult their own tax advisors for advice as to whether an election under subsection 39(4) of the Tax Act is available or advisable in
their particular circumstances.
Taxation
of Dividends
Dividends
received or deemed to be received on the Offered Shares will be included in computing a Resident Holder’s income. In the case of
a Resident Holder who is an individual (including certain trusts), dividends (including deemed dividends) received on the Offered Shares
will be included in the Resident Holder’s income and be subject to the gross-up and dividend tax credit rules applicable to “taxable
dividends” received by an individual from “taxable Canadian corporations” (each as defined in the Tax Act). An enhanced
gross-up and dividend tax credit will be available to individuals in respect of “eligible dividends” designated by the Company
in accordance with the provisions of the Tax Act. There may be limitations on the ability of the Company to designate dividends as “eligible
dividends”.
In
the case of a Resident Holder that is a corporation, such dividends (including deemed dividends) received on the Offered Shares will
be included in the Resident Holder’s income and will normally be deductible in computing such Resident Holder’s taxable income.
In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received (or deemed to be received) by a Resident
Holder that is a corporation as proceeds of disposition or a capital gain. Resident Holders that are corporations should consult their
own tax advisors having regard to their own circumstances.
A
Resident Holder that is a “private corporation” or “subject corporation” (as such terms are defined in the Tax
Act) may be liable to pay a tax under Part IV of the Tax Act (which generally is refundable, subject to the detailed rules of the Tax
Act) on dividends received or deemed to be received on the Offered Shares to the extent that such dividends are deductible in computing
the Resident Holder’s taxable income for the year.
Dispositions
of Offered Shares
A
Resident Holder who disposes of, or is deemed to have disposed of, an Offered Share (other than a disposition to the Company that is
not a sale in the open market in the manner in which shares are normally purchased by any member of the public in the open market) will
realize a capital gain (or incur a capital loss) equal to the amount by which the proceeds of disposition in respect of the Offered Share
exceed (or are exceeded by) the aggregate of the adjusted cost base to the Resident Holder of such Offered Share immediately before the
disposition or deemed disposition and any reasonable expenses incurred for the purpose of making the disposition. The adjusted cost base
to a Resident Holder of an Offered Share will be determined by averaging the cost of that Offered Share with the adjusted cost base (determined
immediately before the acquisition of the Offered Share) of all other common shares held as capital property at that time by the Resident
Holder. The tax treatment of capital gains and capital losses is discussed in greater detail below under the subheading “—Residents
of Canada – Taxation of Capital Gains and Losses”.
Taxation
of Capital Gains and Losses
Generally,
one-half of any capital gain (a “taxable capital gain”) realized by a Resident Holder must be included in the
Resident Holder’s income for the taxation year in which the disposition occurs. Subject to and in accordance with the provisions
of the Tax Act, one-half of any capital loss incurred by a Resident Holder (an “allowable capital loss”) must
generally be deducted from Taxable Capital Gains realized by the Resident Holder in the taxation year in which the disposition occurs.
Allowable capital losses in excess of taxable capital gains for the taxation year of disposition generally may be carried back and deducted
in the three preceding taxation years or carried forward and deducted in any subsequent year against net taxable capital gains realized
in such years, in the circumstances and to the extent provided in the Tax Act.
A
capital loss realized on the disposition of an Offered Share by a Resident Holder that is a corporation may in certain circumstances
be reduced by the amount of dividends which have been previously received or deemed to have been received by the Resident Holder on the
Offered Share, or a share substituted for such share, to the extent and in the circumstances specified by the Tax Act. Similar rules
may apply where a Resident Holder that is a corporation is, directly or indirectly through a trust or partnership, a member of a partnership
or a beneficiary of a trust that owns Offered Shares. A Resident Holder to which these rules may be relevant is urged to consult its
own tax advisor.
Alternative
Taxes
Capital
gains realized (or deemed to be realized) and dividends received (or deemed to be received) by a Resident Holder who is an individual
(including certain trusts) may result in such Resident Holder being liable for minimum tax under the Tax Act. Resident Holders who are
individuals should consult their own tax advisors in this regard.
A
Resident Holder that is throughout the relevant taxation year a “Canadian-controlled private corporation” (as defined in
the Tax Act) may be liable to pay an additional tax (which generally is refundable, subject to the detailed rules of the Tax Act) on
its “aggregate investment income” (as defined in the Tax Act) for the year, which is defined to include an amount in respect
of taxable capital gains and dividends. Tax Proposals released by the Minister of Finance (Canada) on August 9, 2022 are intended to
extend this additional tax and refund mechanism in respect of aggregate investment income to “substantive CCPCs” as defined
in the Tax Proposals. Resident Holders should consult their own tax advisors with regard to this additional tax and refund mechanism.
Non-Residents
of Canada
The
following portion of this summary is generally applicable to a Holder who, for purposes of the Tax Act and at all relevant times, is
neither resident nor deemed to be resident in Canada and does not use or hold, and will not be deemed to use or hold, Offered Shares
in a business carried on in Canada (each, a “Non-Resident Holder”). The term “U.S. Holder,” for
the purposes of this summary, means a Non-Resident Holder who, for purposes of the Canada-U.S. Tax Convention, is at all relevant times
a resident of the United States and is a “qualifying person” within the meaning of the Canada-U.S. Tax Convention. In some
circumstances, persons deriving amounts through fiscally transparent entities (including limited liability companies) may be entitled
to benefits under the Canada-U.S. Tax Convention. U.S. Holders are urged to consult their own tax advisors to determine their entitlement
to benefits under the Canada-U.S. Tax Convention based on their particular circumstances.
Special
considerations, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer that carries on an insurance
business in Canada and elsewhere or an authorized foreign bank (as defined in the Tax Act). Such Non-Resident Holders should consult
their own advisors.
Taxation
of Dividends
Subject
to an applicable tax treaty or convention, dividends paid or credited, or deemed to be paid or credited, to a Non-Resident Holder on
the Offered Shares will be subject to Canadian withholding tax under the Tax Act at the rate of 25% of the gross amount of the dividend.
Such rate is generally reduced under the Canada-U.S. Tax Convention to 15% of the gross amount of the dividend if the beneficial owner
of such dividend is a U.S. Holder. The rate of withholding tax is further reduced to 5% if the beneficial owner of such dividend is a
U.S. Holder that is a company that owns at least 10% of the voting stock of the Company. In addition, under the Canada-U.S. Tax Convention,
dividends may be exempt from such Canadian withholding tax if paid to certain U.S. Holders that are qualifying religious, scientific,
literary, educational or charitable tax exempt organizations or qualifying trusts, companies, organizations or arrangements operated
exclusively to administer or provide pension, retirement or employee benefits or benefits for the self-employed under one or more funds
or plans established to provide pension or retirement benefits or other employee benefits that are exempt from tax in the United States
and that have complied with specific administrative procedures.
The
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, of which Canada
is a signatory, affects many of Canada’s bilateral tax treaties, including the ability to claim benefits thereunder. Affected Non-Resident
Holders should consult their own tax advisors in this regard.
Disposition
of Offered Shares
A
Non-Resident Holder will not be subject to tax under the Tax Act in respect of any capital gain realized by such Non-Resident Holder
on a disposition of Offered Shares, unless the Offered Shares constitute “taxable Canadian property” (as defined in the Tax
Act) of the Non-Resident Holder at the time of the disposition and are not “treaty-protected property” (as defined in the
Tax Act) of the Non-Resident Holder at the time of the disposition.
Provided
the Offered Shares are listed on a “designated stock exchange” (as defined in the Tax Act) (which currently includes the
TSXV) at the time of disposition, the Offered Shares will not constitute taxable Canadian property of a Non-Resident Holder at that time,
unless at any time during the 60-month period immediately preceding the disposition the following two conditions are met concurrently:
(a) the Non-Resident Holder, persons with whom the Non-Resident Holder does not deal at arm’s length, partnerships whose members
include, either directly or indirectly through one or more partnerships, the Non-Resident Holder or persons who do not deal at arm’s
length with the Non-Resident Holder, or any combination of them, owned 25% or more of the issued shares of any class or series of shares
of the capital stock of the Company, and (b) more than 50% of the fair market value of the Offered Shares was derived directly or indirectly,
from one or any combination of real or immovable property situated in Canada, “Canadian resource properties”, “timber
resource properties” (each as defined in the Tax Act), and options in respect of or interests in, or for civil law rights in, any
such property (whether or not such property exists).
Notwithstanding
the foregoing, an Offered Share may otherwise be deemed to be taxable Canadian property to a Non-Resident Holder for purposes of the
Tax Act in particular circumstances.
The
Offered Shares of a U.S. Holder will generally constitute “treaty-protected property” for purposes of the Tax Act unless
the value of the Offered Shares is derived principally from real property situated in Canada. For this purpose, “real property”
has the meaning that term has under the laws of Canada and includes any option or similar right in respect thereof and usufruct of real
property, rights to explore for or to exploit mineral deposits, sources and other natural resources and rights to amounts computed by
reference to the amount or value of production from such resources.
If
Offered Shares are taxable Canadian property (or deemed to be taxable Canadian property) of a Non-Resident Holder and are not treaty-protected
property of the Non-Resident Holder at the time of their disposition, the consequences above under “— Residents of Canada
— Disposition of Offered Shares” and “— Residents of Canada — Taxation of Capital Gains and Capital Losses”
will generally apply.
Non-Resident
Holders whose Offered Shares are taxable Canadian property should consult their own advisors.
CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The
following is a general summary of certain anticipated U.S. federal income tax considerations applicable to a U.S. Holder (as defined
below) arising from and relating to the acquisition, ownership and disposition of Offered Shares acquired pursuant to this prospectus
supplement.
This
summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal
income tax considerations that may apply to a U.S. Holder as a result of the acquisition, ownership and disposition of Offered Shares
acquired pursuant to this prospectus supplement. This summary does not take into account the individual facts and circumstances of any
particular U.S. Holder that may affect the U.S. federal income tax considerations applicable to such U.S. Holder of Offered Shares. Accordingly,
this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S.
Holder. U.S. Holders should consult their own tax advisors regarding the U.S. federal, U.S. state and local, and non-U.S. tax consequences
relating to the acquisition, ownership and disposition of Offered Shares.
No
ruling from the U.S. Internal Revenue Service (the “IRS”) or legal opinion has been requested, or will be obtained,
regarding the potential U.S. federal income tax considerations applicable to U.S. Holders as discussed in this summary. This summary
is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions
taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the
IRS and the U.S. courts could disagree with one or more of the positions taken in this summary.
Scope
of this Summary
Authorities
This
summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), regulations promulgated by
the Department of the Treasury (whether final, temporary or proposed) (“Treasury Regulations”), U.S. court
decisions, published rulings and administrative positions of the IRS, and the Canada-U.S. Tax Convention, in each case, in effect as
of the date of this prospectus supplement. Any of the authorities on which this summary is based could be changed in a material and adverse
manner possibly with retroactive effect, at any time.
U.S.
Holder
For
purposes of this section, a “U.S. Holder” is a beneficial owner of Offered Shares acquired pursuant to this
prospectus supplement that is, for U.S. federal income tax purposes, (a) an individual who is a citizen or resident of the United States;
(b) a corporation, or other entity treated as a corporation, that is created or organized in or under the laws of the United States or
any state in the United States or the District of Columbia; (c) an estate if the income of such estate is subject to U.S. federal income
tax regardless of the source of such income; or (d) a trust if (i) such trust has validly elected to be treated as a U.S. person for
U.S. federal income tax purposes, or (ii) a U.S. court is able to exercise primary supervision over the administration of such trust
and one or more U.S. persons have the authority to control all substantial decisions of such trust.
Non-U.S.
Holder
For
purposes of this summary, a “Non-U.S. Holder” is a beneficial owner of Offered Shares that is neither a U.S.
Holder nor a partnership (or other “pass-through” entity) for U.S. federal income tax purposes. This summary does not address
the U.S. federal income tax considerations applicable to Non-U.S. Holders relating to the acquisition, ownership and disposition of Offered
Shares. Accordingly, Non-U.S. Holders should consult their own tax advisors regarding the U.S. federal, U.S. state and local, and non-U.S.
tax consequences (including the potential application of and operation of the Canada-U.S. Tax Convention or any other tax treaties) relating
to the acquisition, ownership, and disposition of Offered Shares.
U.S.
Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed
This
summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions
under the Code, including, that: (a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement
accounts or other tax deferred accounts; (b) U.S. Holders that are financial institutions, underwriters, insurance companies, real estate
investment trusts or regulated investment companies or that are broker-dealers, dealers, or traders in securities or currencies that
elect to apply a mark-to-market accounting method; (c) U.S. Holders that have a “functional currency” other than the dollar;
(d) U.S. Holders that own Offered Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale or other
integrated transaction; (e) U.S. Holders that acquired Offered Shares in connection with the exercise of employee stock options or otherwise
as compensation for services; (f) U.S. Holders that hold Offered Shares other than as a capital asset (generally property held for investment
purposes) within the meaning of Section 1221 of the Code; (g) U.S. Holders that are partnerships or other flow-through entities; (h)
U.S. Holders that are subject to special tax accounting rules with respect to the Offered Shares for U.S. federal income tax purposes;
(i) U.S. Holders that are subject to taxing jurisdictions other than, or in addition to, the United States; or (j) U.S. Holders that
own, directly, indirectly or by attribution, 10% or more, by voting power or value, of the outstanding shares of the Company. The summary
below also does not address the impact of the Offering on persons who are U.S. expatriates or former long-term residents of the United
States subject to Section 877 or 877A of the Code. U.S. Holders and others that are subject to special provisions under the Code, including
U.S. Holders described immediately above, should consult their own tax advisors regarding the U.S. federal income tax consequences relating
to the acquisition, ownership and disposition of Offered Shares.
If
a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Offered Shares, the
tax treatment of a partner in the partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes)
will generally depend on the status of the partner and the activities of the partnership. Partners in partnerships (or other entities
or arrangements treated as partnerships for U.S. federal income tax purposes) that are beneficial owners of Offered Shares should consult
their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership and
disposition of Offered Shares.
Tax
Considerations Other than U.S. Federal Income Tax Considerations Not Addressed
This
summary does not address the U.S. state and local tax, U.S. estate, gift, and generation-skipping tax, U.S. federal net investment income,
the excise tax on stock repurchases, U.S. federal alternative minimum tax or corporate alternative minimum tax, or non-U.S. tax considerations
to U.S. Holders relating to the acquisition, ownership, and disposition of Offered Shares. In addition, except as specifically set forth
below, this summary does not discuss applicable tax reporting requirements. Each U.S. Holder should consult its own tax advisor regarding
the U.S. state and local tax, U.S. estate, gift, and generation-skipping tax, U.S. federal net investment income, U.S. federal alternative
minimum tax and non-U.S. tax considerations relating to the acquisition, ownership, and disposition of Offered Shares.
U.S.
Federal Income Tax Consequences of the Acquisition, Ownership and Disposition of Offered Shares
Classification
as a Passive Foreign Investment Company
As
discussed below under “Passive Foreign Investment Company Rules - PFIC Status of the Company”, although the Company has not
made a formal determination as to whether it was a “passive foreign investment company” under Section 1297 of the Code (“PFIC”)
for the tax year ended April 30, 2022, and does not plan to make such a determination for subsequent years, the Company believes there
is a significant risk that it was a PFIC for the tax year ended April 30, 2022, and anticipates that there will be a significant risk
that it will be a PFIC in subsequent years. If the Company is classified as a PFIC in any taxable year in which a U.S. Holder holds Offered
Shares, the Company generally will be considered a PFIC with respect to such Offered Shares in subsequent taxable years even if the Company
is otherwise not a PFIC in such subsequent taxable years. If the Company is considered to be a PFIC with respect to a U.S. Holder’s
Offered Shares, such holder generally will be liable to pay income tax at the highest ordinary income tax rate on any “excess distribution”
from the Company and on the U.S. Holder’s gain from the disposition of Offered Shares as if such excess distribution or gain had
been recognized ratably over the U.S. Holder’s holding period for the Offered Shares, plus interest on such amount as if it were
treated as a series of underpayments of tax in such prior years. Each U.S. Holder should consult its own tax advisor regarding the classification
of the Company as a PFIC and the consequences of such classification. The Company has not made a formal determination in past years.
For the fiscal years ended April 30, 2021, 2020, 2019 and 2018, pursuant to Treasury Regulation Section 1.1295-1(g)(1), the Company issued
to its U.S. Shareholders a “PFIC Annual Information Statement” to assist U.S. Shareholders who wish to make a QEF Election.
Distributions
on Offered Shares
Subject
to the PFIC rules discussed below, a U.S. Holder that receives a distribution with respect to an Offered Share will be required to include
the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution)
to the extent of the current or accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax
purposes. To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such
distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder’s tax basis in the Offered Shares,
and thereafter as a gain from the sale or exchange of such Offered Shares (see “Sale or Other Taxable Disposition of Offered Shares”
below). However, the Company does not expect to determine its current and accumulated earnings and profits in accordance with U.S. federal
income tax principles, and U.S. Holders should therefore assume that any distribution by the Company with respect to Offered Shares will
constitute dividend income. Dividends received on Offered Shares will not be eligible for the “dividends received deduction”
allowed to corporations under the Code with respect to dividends received from domestic corporations.
Subject
to applicable limitations and provided the Company is eligible for the benefits of the Canada-U.S. Tax Convention or the Offered Shares
are readily tradable on a United States securities market, dividends paid by the Company to non-corporate U.S. Holders, including individuals,
generally will be eligible for preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period
and other conditions are satisfied, including that the Company is not classified as a PFIC in the tax year of distribution or in the
preceding tax year. Dividends paid to a U.S. Holder that do not result in qualified dividend income generally will be taxed at ordinary
income tax rates. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the application of
such rules.
Sale
or Other Taxable Disposition of Offered Shares
Subject
to the PFIC rules discussed below, upon the sale or other taxable disposition of Offered Shares, a U.S. Holder generally will recognize
gain or loss in an amount equal to the difference between (a) the amount of cash plus the fair market value of any property received
and (b) its tax basis in such Offered Shares sold or otherwise disposed of. Such gain or loss will be a long-term capital gain or loss
if the Offered Shares have been held for more than one year and will be short-term gain or loss if the holding period is equal to or
less than one year. Such gain generally will be treated as “U.S. source” for purposes of applying the U.S. foreign tax credit
rules unless the gain is subject to tax in Canada and is re-sourced as “foreign source” under the Canada-U.S. Tax Convention
and such U.S. Holder elects to treat such gain or loss as “foreign source” (see a more detailed discussion at “Foreign
Tax Credit” below). Long-term capital gains of certain non-corporate U.S. Holders are eligible for reduced rates of taxation. Deductions
for capital losses are subject to complex limitations.
Foreign
Tax Credit
A
U.S. Holder who pays Canadian withholding tax with respect to dividends paid on Offered Shares generally may elect to deduct or credit
such tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding)
by a U.S. Holder during a year.
Complex
limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of
a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears
to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and
deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” In addition,
this limitation is calculated separately with respect to specific categories of income. Dividends paid by the Company generally will
constitute “foreign source” income and generally will be categorized as “passive category income”. Because the
foreign tax credit rules are complex, U.S. Holders should consult their own tax advisors regarding the foreign tax credit rules, including
the source of any dividends paid to U.S. Holders.
Subject
to certain specific rules, foreign income and withholding taxes paid with respect to any distribution in respect of stock in a PFIC should
qualify for the foreign tax credit. The rules relating to foreign tax credits applicable to distributions by a PFIC are complex, and
a U.S. Holder should consult with its own tax advisor with respect to any distribution received from a PFIC.
Receipt
of Foreign Currency
The
amount of any distribution paid in foreign currency to a U.S. Holder in connection with the ownership of Offered Shares, or on the sale,
exchange or other taxable disposition of Offered Shares, generally will be equal to the U.S. dollar value of such foreign currency based
on the exchange rate applicable on the date of actual or constructive receipt (regardless of whether such foreign currency is converted
into U.S. dollars at that time). If the foreign currency received is not converted into U.S. dollars on the date of receipt, a U.S. Holder
will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. A U.S. Holder that receives foreign
currency and converts such foreign currency into U.S. dollars at a conversion rate other than the rate in effect on the date of receipt
may have a foreign currency exchange gain or loss, which generally would be treated as U.S. source ordinary income or loss for foreign
tax credit purposes. U.S. Holders should consult their own U.S. tax advisors regarding the U.S. federal income tax consequences of receiving,
owning and disposing of foreign currency.
Passive
Foreign Investment Company Rules
If
the Company is a PFIC within the meaning of Section 1297 of the Code at any time during a U.S. Holder’s holding period, then certain
different and potentially adverse tax consequences would apply to such U.S. Holder’s acquisition, ownership and disposition of
Offered Shares.
PFIC
Status of the Company
The
Company generally will be a PFIC if, for a given tax year, (a) 75% or more of the gross income of the Company for such tax year is “passive
income” (the “income test”) or (b) on average at least 50% or more of the assets in a taxable year held
by the Company either produce passive income or are held for the production of passive income, based on the quarterly average of the
fair market value of such assets (the “asset test”). “Gross income” generally includes all income less
the cost of goods sold, and “passive income” for this purpose includes, among other things, dividends, interest, rents and
royalties (other than rents and royalties derived from the active conduct of a trade or business), and gains from the sale or exchange
of property that gives rise to passive income. Assets that produce or are held for the production of passive income generally include
cash, even if held as working capital or raised in a public offering, marketable securities, and other assets that may produce passive
income.
For
purposes of the PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total
value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets
of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes
of the PFIC income test and asset test described above, “passive income” does not include any interest, dividends, rents
or royalties that are received or accrued by the Company from a “related person” (as defined in Section 954(d)(3) of the
Code), to the extent such items are properly allocable to the income of such related person that is not passive income.
Under
certain attribution rules, if the Company is a PFIC for any taxable year during which U.S. Holders hold Offered Shares and one of our
non-U.S. corporate subsidiaries is also a PFIC (a “lower-tier PFIC”), U.S. Holders will be deemed to own their
proportionate share (by value) of the shares of the lower-tier PFIC, and will be subject to U.S. federal income tax on (a) a distribution
on the shares of a lower-tier PFIC and (b) a disposition of shares of a lower-tier PFIC, both as if the U.S. Holder directly held the
shares of such lower-tier PFIC, even though such U.S. Holder may not receive the proceeds of those distributions or dispositions. U.S.
Holders are advised to consult its tax advisors regarding the application of the PFIC rules to our non-U.S. Subsidiaries.
Although
the Company has not made a formal determination as to whether it was a PFIC for the tax year ended April 30, 2022, and does not plan
to make such a determination for subsequent years, the Company believes there is a significant risk that it was a PFIC for the tax year
ended April 30, 2022, and anticipates that there will be a significant risk that it will be a PFIC in subsequent years. The determination
of whether the Company (or a subsidiary of the Company) was, or will be, a PFIC for a tax year depends, in part, on the application of
complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether the Company (or subsidiary)
will be a PFIC for any tax year depends on the assets and income of the Company (and each such subsidiary) over the course of each such
tax year and, as a result, cannot be predicted with certainty as of the date of this prospectus supplement. Accordingly, there can be
no assurance that the IRS will not challenge any determination made by the Company (or subsidiary) concerning its PFIC status or that
the Company (and any subsidiary) was not, or will not be, a PFIC for any tax year. U.S. Holders should consult their own tax advisors
regarding the PFIC status of the Company and any subsidiary of the Company.
Default
PFIC Rules under Section 1291 of the Code
If
the Company is a PFIC, the U.S. federal income tax considerations to a U.S. Holder of the acquisition, ownership and disposition of Offered
Shares will depend on whether such U.S. Holder makes a Qualified Electing Fund Election under Section 1295 of the Code (“QEF
Election”) or makes a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market Election”)
with respect to Offered Shares. A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred
to in this summary as a “Non-Electing U.S. Holder.”
A
Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code with respect to (a) any gain recognized on the sale
or other taxable disposition of Offered Shares and (b) any excess distribution paid on the Offered Shares. A distribution generally will
be an “excess distribution” to the extent that such distribution (together with all other distributions received in the current
tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder’s holding
period for the Offered Shares, if shorter).
If
the Company is a PFIC, under Section 1291 of the Code any gain recognized on the sale or other taxable disposition of Offered Shares
(including an indirect disposition of shares of a lower-tier PFIC), and any excess distribution paid on Offered Shares (or a distribution
by a lower-tier PFIC to its shareholder that is deemed to be received by a U.S. Holder) must be ratably allocated to each day of a Non-Electing
U.S. Holder’s holding period for the Offered Shares, as applicable. The amount of any such gain or excess distribution allocated
to the tax year of disposition or excess distribution and to years before the Company became a PFIC, if any, would be taxed as ordinary
income. The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax rate applicable to
ordinary income in each such year without regard to the U.S. Holder’s other tax attributes, and an interest charge would be imposed
on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder
that is not a corporation must treat any such interest paid as “personal interest,” which is not deductible.
If
the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds Offered Shares, the Company will continue to be
treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more
subsequent years. If the Company ceases to be a PFIC, a Non-Electing U.S. Holder may terminate this deemed PFIC status with respect to
Offered Shares by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if
such Offered Shares were sold on the last day of the last tax year for which the Company was a PFIC.
QEF
Election
If
the Company is a PFIC and a U.S. Holder makes a QEF Election for the first tax year in which its holding period of its Offered Shares
begins, such U.S. Holder generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its Offered
Shares. However, a U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata
share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary
earnings of the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, “net capital gain” is the
excess of (a) net long-term capital gain over (b) net short-term capital gain, and “ordinary earnings” are the excess of
(a) “earnings and profits” over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal
income tax on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed
to such U.S. Holder by the Company. However, a U.S. Holder that makes a QEF Election may, subject to certain limitations, elect to defer
payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation,
any such interest paid will be treated as “personal interest,” which is not deductible.
A
U.S. Holder that makes a QEF Election generally (a) may receive a tax-free distribution from the Company to the extent that such distribution
represents “earnings and profits” of the Company that were previously included in income by the U.S. Holder because of such
QEF Election and (b) will adjust such U.S. Holder’s tax basis in the Offered Shares to reflect the amount included in income or
allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally will
recognize capital gain or loss on the sale or other taxable disposition of Offered Shares.
The
procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such
QEF Election is timely. A QEF Election will be treated as timely if it is made for the first year in the U.S. Holder’s holding
period for the Offered Shares in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate
QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year.
A
QEF Election will apply to the tax year for which such QEF Election is made and to all subsequent tax years, unless such QEF Election
is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a
subsequent tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during
those tax years in which the Company is not a PFIC. Accordingly, if the Company becomes a PFIC in a subsequent tax year, the QEF Election
will be effective, and the U.S. Holder will be subject to the QEF rules described above during a subsequent tax year in which the Company
qualifies as a PFIC.
U.S.
Holders should be aware that, for each tax year, if any, that the Company is a PFIC, the Company can provide no assurances that it will
satisfy the record-keeping requirements or make available to U.S. Holders a PFIC Annual Information Statement or any other information
such U.S. Holders require to make a QEF Election with respect to the Company or any subsidiary that also is classified as a PFIC. Accordingly,
it is expected that U.S. Holders will not be able to make a QEF Election with respect to the Company or its subsidiaries.
Mark-to-Market
Election
A
U.S. Holder may make a Mark-to-Market Election only if the Offered Shares are marketable stock. The Offered Shares generally will be
“marketable stock” if they are regularly traded on (a) a national securities exchange that is registered with the SEC; (b)
the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934; or (c) a foreign securities
exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i)
such foreign exchange has trading volume, listing, financial disclosure and other requirements and the laws of the country in which such
foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced; and
(ii) the rules of such foreign exchange ensure active trading of listed stocks. If such stock is traded on such a qualified exchange
or other market, such stock generally will be “regularly traded” for any calendar year during which such stock is traded,
other than in de minimis quantities, on at least 15 days during each calendar quarter.
A
U.S. Holder that makes a Mark-to-Market Election with respect to its Offered Shares generally will not be subject to the rules of Section
1291 of the Code discussed above. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of
such U.S. Holder’s holding period for Offered Shares or such U.S. Holder has not made a timely QEF Election, the rules of Section
1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the Offered Shares.
A
U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an
amount equal to the excess, if any, of (a) the fair market value of the Offered Shares, as of the close of such tax year over (b) such
U.S. Holder’s tax basis in such Offered Shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction
in an amount equal to the excess, if any, of (i) such U.S. Holder’s adjusted tax basis in the Offered Shares over (ii) the fair
market value of such Offered Shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market
Election for prior tax years).
U.S.
Holders that make a Mark-to-Market Election generally also will adjust their tax basis in the Offered Shares to reflect the amount included
in gross income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition
of Offered Shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or loss (not to exceed the excess,
if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount
allowed as a deduction because of such Mark-to-Market Election for prior tax years).
A
Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless
the Offered Shares cease to be “marketable stock” or the IRS consents to revocation of such election. U.S. Holders should
consult their own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market Election.
Although
a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to Offered Shares, no such election may be made with respect
to the stock of any lower-tier PFIC that a U.S. Holder is treated as owning because such stock is not marketable. Hence, the Mark-to-Market
Election will not be effective to eliminate the interest charge described above with respect to deemed dispositions of lower-tier PFIC
stock or distributions from a lower-tier PFIC.
The
PFIC rules are complex, and U.S. Holders should consult their own tax advisors regarding the PFIC rules and how they may affect the U.S.
federal income tax consequences of the acquisition, ownership, and disposition of Offered Shares in the event the Company is a PFIC at
any time during the holding period for such Offered Shares.
Information
Reporting and Backup Withholding
Certain
U.S. Holders are required to report information relating to an interest in Offered Shares, subject to certain exceptions (including
an exception for Offered Shares held in accounts maintained by certain financial institutions), by attaching a completed IRS Form
8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold an interest in Offered
Shares. Failure to do so could result in substantial penalties and in the extension of the statute of limitations with respect to
such holder’s U.S. federal income tax returns. In addition, if U.S. Holders hold Offered Shares in any tax year in which we
are classified as a PFIC, such U.S. Holders will generally be required to file an IRS Form 8621, Information Return by a Shareholder
of a Passive Foreign Investment Company or Qualified Electing Fund, for such tax year. The failure to file IRS Form 8621 could result
in the imposition of penalties and the extension of the statute of limitations with respect to U.S. federal income tax. U.S. Holders
are urged to consult their own tax advisors regarding information reporting requirements relating to their ownership of the Offered
Shares.
Payments
made within the United States, or by a U.S. payor or U.S. middleman, of dividends on Offered Shares, and proceeds arising from certain
sales or other taxable dispositions of Offered Shares, may be subject to information reporting and backup withholding tax, currently
at the rate of 24%, if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. social security or other taxpayer identification
number (generally on Form W-9); (b) furnishes an incorrect U.S. taxpayer identification number; (c) is notified by the IRS that such
U.S. Holder has previously failed to properly report items subject to backup withholding tax; or (d) fails under certain circumstances
to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the
IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, U.S. Holders that are corporations generally
are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts
withheld under the U.S. backup withholding rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability,
if any, or will be refunded, if such U.S. Holder timely furnishes the required information to the IRS.
The
discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements
that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during
which the IRS can assess a tax, and under certain circumstances, such an extension may apply to assessments of amounts unrelated to any
unsatisfied reporting requirement. U.S. Holders should consult their own tax advisors regarding the information reporting and backup
withholding tax rules.
THE
ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO
THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF OFFERED SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS
APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.
LEGAL
MATTERS
Certain
legal matters relating to the Offering hereby will be passed upon on behalf of the Company by Sangra Moller LLP, with respect to Canadian
legal matters, and by Haynes and Boone, LLP, with respect to United States legal matters, and on behalf of the Agents by DLA Piper (Canada)
LLP, with respect to Canadian legal matters, and by DLA Piper LLP (US), with respect to United States legal matters.
INTEREST
OF EXPERTS
Darcy
Hirsekorn, the Company’s Chief Technical Officer, has supervised the preparation of and reviewed the technical information incorporated
by reference into this prospectus supplement. He holds a B.Sc. in Geology from the University of Saskatchewan, is a “qualified
person” as defined in NI 43-101 and is registered as a professional geoscientist in Saskatchewan.
The
scientific and technical information relating to the Roughrider Project incorporated by reference into this prospectus supplement has
been included in reliance on the Roughrider Technical Report. Pieter I. Du Plessis, P.Geo., a “qualified person” as defined
in NI 43-101, is the author responsible for the preparation of the Roughrider Technical Report.
None
of the foregoing experts, nor any partner, employee or consultant of such an expert who participated in and who was in a position to
directly influence the preparation of the applicable statement, report or valuation, has, has received, or is expected to receive, registered
or beneficial interests, direct or indirect, in common shares or other property of the Company or any of its associates or affiliates
representing 1% or more of the outstanding common shares.
As
of the date of this prospectus supplement, the partners and associates, as a group, of each of Sangra Moller LLP and DLA Piper (Canada)
LLP beneficially own, directly and indirectly, less than 1% of the issued and outstanding common shares of the Company or any of its
associates or affiliates.
AUDITORS
Our
financial statements as at April 30, 2022 and April 30, 2021 and for the years then ended incorporated by reference into this prospectus
supplement have been audited by PricewaterhouseCoopers LLP, independent auditor, as indicated in their report dated July 27, 2022, which
is also incorporated by reference herein. The audited financial statements have been incorporated by reference in the Registration Statement
and this prospectus supplement in reliance on the report of the independent auditor, given on their authority as experts in auditing
and accounting. PricewaterhouseCoopers LLP have advised the board of directors of the Company that they are independent of the Company
within the meaning of the Chartered Professional Accountants of British Columbia Code of Professional Conduct and in accordance with
the independence rules of the SEC and the Public Company Accounting Oversight Board (United States).
REGISTRAR
AND TRANSFER AGENT
The
registrar and transfer agent for the common shares is Computershare Investor Services Inc. at its principal offices in Vancouver, British
Columbia.
ENFORCEABILITY
OF CERTAIN CIVIL LIABILITIES
We
are a company incorporated under the Canada Business Corporations Act. Some of our directors and officers, and the experts named
in this prospectus supplement, are residents of Canada or otherwise reside outside the United States, and all or a substantial portion
of their assets may be, and a substantial portion of the Company’s assets are, located outside the United States. The Company
has appointed an agent for service of process in the United States (as set forth in the prospectus), but it may be difficult for
holders of securities who reside in the United States to effect service within the United States upon those directors, officers
and experts who are not residents of the United States. It may also be difficult for holders of securities who reside in the United
States to realize in the United States upon judgments of courts of the United States predicated upon our civil liability and the
civil liability of our directors, officers and experts under the United States federal securities laws. We have been advised that
a judgment of a U.S. court predicated solely upon civil liability under U.S. federal securities laws or the securities or “blue
sky” laws of any state within the United States, would likely be enforceable in Canada if the United States court in which
the judgment was obtained has a basis for jurisdiction in the matter that would be recognized by a Canadian court for the same purposes.
We have also been advised, however, that there is substantial doubt whether an action could be brought in Canada in the first instance
on the basis of the liability predicated solely upon U.S. federal securities laws.
No
securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This short form
base shelf prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered
for sale and only by persons permitted to sell such securities. See “Plan of Distribution”.
Information
has been incorporated by reference in this short form base shelf prospectus from documents filed with securities commissions or similar
authorities in Canada.
Copies
of the documents incorporated herein by reference may be obtained on request without charge from the Chief Financial Officer of Uranium
Royalty Corp., 1030 West Georgia Street, Suite 1830, Vancouver, British Columbia V6E 2Y3, telephone number 604-396-8222 and are also
available electronically at www.sedar.com.
SHORT
FORM BASE SHELF PROSPECTUS
URANIUM
ROYALTY CORP.
$130,000,000
Common
Shares
Preferred
Shares
Warrants
Subscription
Receipts
Units
Debt
Securities
This
short form base shelf prospectus (the “Prospectus”) relates to the offering for sale by Uranium Royalty Corp.
(the “Company”) from time to time, during the 25-month period that this Prospectus, including any amendments
hereto, remains effective, of up to $130,000,000 (or the equivalent in other currencies based on the applicable exchange rate
at the time of the offering) in the aggregate of: (i) common shares in the capital of the Company (“Common Shares”);
(ii) preferred shares in the capital of the Company (“Preferred Shares”), issuable in series; (iii) warrants
(“Warrants”) to purchase other Securities (as defined below) of the Company; (iv) subscription receipts (“Subscription
Receipts”) convertible into other Securities of the Company; (v) debentures, notes or other evidence of indebtedness
of any kind, nature or description and which may be issuable in series (collectively, “Debt Securities”); and
(vi) units (“Units”) comprised of one or more of any of the other Securities, or any combination of such Securities
(the Common Shares, Preferred Shares, Warrants, Subscription Receipts, Debt Securities and Units are collectively referred to
herein as the “Securities”). The Securities may be offered separately or together, in amounts, at prices and
on terms to be determined based on market conditions at the time of sale and set forth in an accompanying prospectus supplement
(each, a “Prospectus Supplement”). In addition, the Securities may be offered and issued in consideration for
the acquisition of other businesses, assets or securities by the Company or one of its subsidiaries. The consideration for any
such acquisition may consist of the Securities separately, a combination of Securities or any combination of, among other things,
Securities, cash and assumption of liabilities.
The issued and outstanding Common Shares of the Company
are listed and posted for trading on the TSX Venture Exchange (“TSXV”) under the symbol “URC”, and on
the Nasdaq Capital Market (the “Nasdaq”) under the symbol “UROY”. Certain outstanding and listed common
share purchase warrants of the Company (the “Listed Warrants”) are listed on the TSXV under the symbol “URC.WT”.
On June 15, 2021, the last complete trading day prior to the date of this Prospectus, the closing price of the Common Shares on
the TSXV was $3.09 per Common Share, and on the Nasdaq was US$2.52 per Common Share. The closing price of the Listed Warrants
as at the last trading day prior to the date of this Prospectus was $1.27 per Listed Warrant. Unless otherwise specified in an
applicable Prospectus Supplement, any Securities, other than Common Shares and Listed Warrants, will not be listed on any securities
or stock exchange or on any automated dealer quotation system.
The
Company is permitted, under a multi-jurisdictional disclosure system adopted by the securities regulatory authorities in Canada
and the United States, to prepare this Prospectus in accordance with the disclosure requirements of Canada. Prospective investors
in the United States should be aware that such requirements are different from those of the United States. The financial statements
incorporated by reference herein have been prepared in accordance with International Financial Reporting Standards as issued by
the International Accounting Standards Board (“IFRS”) and may not be comparable to financial statements of United
States companies.
The
enforcement by investors of civil liabilities under the United States federal securities laws may be affected adversely by the
fact that the Company is governed by the laws of Canada, that some of its officers and directors are residents of a foreign country,
that some of the experts named in this Prospectus are, and the underwriters, dealers or agents named in any Prospectus Supplement
may be, residents of a foreign country, and a substantial portion of the assets of the Company and said persons may be located
outside of the United States. See “Enforceability of Certain Civil Liabilities”.
THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC”)
NOR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.
Investing
in Securities of the Company involves a high degree of risk. You should carefully review the risks outlined in this Prospectus
(together with any Prospectus Supplement) and in the documents incorporated by reference in this Prospectus and any Prospectus
Supplement and consider such risks in connection with an investment in such Securities. See “Risk Factors”.
Prospective
investors should be aware that the acquisition of the Securities may have tax consequences in Canada and the United States. Such
consequences may not be described fully herein or in any applicable Prospectus Supplement. Prospective investors should read the
tax discussion contained in this Prospectus under the heading “Certain Federal Income Tax Considerations” as
well as the tax discussion, if any, contained in the applicable Prospectus Supplement with respect to a particular offering of
Securities.
The
specific terms of any Securities with respect to a particular offering will be described in the applicable Prospectus Supplement
including, where applicable: (i) in the case of Common Shares, the number of Common Shares offered, the offering price, whether
the Common Shares are being offered for cash, and any other terms specific to the Common Shares; (ii) in the case of Preferred
Shares, the designation of the particular series, the number of Preferred Shares offered, the offering price, any voting rights,
any rights to receive dividends, any terms of redemption, any conversion or exchange rights and any other specific terms; (iii)
in the case of Warrants, the number of Warrants being offered, the offering price, whether the Warrants are being offered for
cash, the designation, number and terms of the other Securities issuable upon exercise of the Warrants, and any procedures that
will result in the adjustment of those numbers, the exercise price, the dates and periods of exercise, the currency in which the
Warrants are issued and any other specific terms; (iv) in the case of Subscription Receipts, the number of Subscription Receipts
being offered, the offering price, whether the Subscription Receipts are being offered for cash, the terms, conditions and procedures
for the conversion of the Subscription Receipts into other Securities, the designation, number and terms of such other Securities,
the currency in which such other Securities are issued and any other terms specific to the Subscription Receipts; (v) in the case
of Debt Securities, the specific designation of the Debt Securities, whether such Debt Securities are senior or subordinated,
the aggregate principal amount of the Debt Securities being offered, the currency or currency unit in which the Debt Securities
may be purchased, authorized denominations, any limit on the aggregate principal amount of the Debt Securities of the series being
offered, the issue and delivery date, the maturity date, the offering price (at par, at a discount or at a premium), the interest
rate or method of determining the interest rate, the interest payment date(s), any conversion or exchange rights that are attached
to the Debt Securities, any redemption provisions, any repayment provisions, and any other specific terms; and (vi) in the case
of Units, the number of Units being offered, the offering price and the designation, number and terms of the Securities comprising
the Units. A Prospectus Supplement relating to a particular offering of Securities may include terms pertaining to the Securities
being offered thereunder that are not within the terms and parameters described in this Prospectus. Where required by statute,
regulation or policy, and where the Securities are offered in currencies other than Canadian dollars, appropriate disclosure of
foreign exchange rates applicable to the Securities will be included in the Prospectus Supplement describing the Securities.
All
information permitted under applicable securities laws to be omitted from this Prospectus will be contained in one or more Prospectus
Supplements that will be delivered to purchasers together with this Prospectus to the extent required by applicable securities
law. Each Prospectus Supplement will be incorporated by reference into this Prospectus for the purposes of securities legislation
as of the date of the Prospectus Supplement and only for the purposes of the distribution of the Securities to which the Prospectus
Supplement pertains. Prospective investors should read this Prospectus and any applicable Prospectus Supplement carefully before
investing in any Securities issued pursuant to this Prospectus.
This
Prospectus constitutes a public offering of the Securities only in those jurisdictions where they may be lawfully offered for
sale and only by persons permitted to sell the Securities in those jurisdictions. The Company may offer and sell the Securities
to or through underwriters or dealers purchasing as principals, and may also sell directly to one or more purchasers or through
agents or pursuant to exemptions from registration or qualifications under applicable securities law. The Prospectus Supplement
relating to each issue of Securities will identify each underwriter, dealer or agent, as the case may be, engaged by the Company
in connection with the offering and sale of the Securities, and will set forth the terms of the offering of such Securities, including,
to the extent applicable, any fees, discounts or any other compensation payable to underwriters, dealers or agents in connection
with the offering, the method of distribution of the Securities, the initial issue price (in the event that the offering is a
fixed price distribution), the proceeds that the Company will or expects to receive, and any other material terms of the plan
of distribution. This Prospectus may qualify an “at-the-market distribution” as defined in National Instrument 44-102
– Shelf Distributions (“NI 44-102”).
The
Securities may be sold from time to time in one or more transactions at a fixed price or prices or at non-fixed prices. If offered
on a non-fixed price basis, the Securities may be offered at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at prices to be negotiated with purchasers at the time of sale, which prices vary as between
purchasers and during the period of distribution of the Securities.
In
connection with any offering of Securities (unless otherwise specified in a Prospectus Supplement), other than an “at-the-market”
distribution, the underwriters, dealers or agents may over-allot or effect transactions which stabilize or maintain the market
price of the Securities offered at a level above that which might otherwise prevail in the open market. Such transactions may
be commenced, interrupted or discontinued at any time. No underwriter, dealer or agent involved in an “at-the-market distribution”
under this Prospectus, no affiliate of such an underwriter, dealer or agent and no person or company acting jointly or in concert
with such an underwriter, dealer or agent will over-allot Securities in connection with such distribution or effect any other
transactions that are intended to stabilize or maintain the market price of the Securities, including selling an aggregate number
or principal amount of Securities that would result in the underwriter, dealer or agent creating an over-allotment position in
the Securities. See “Plan of Distribution”.
No
underwriter has been involved in the preparation of the Prospectus or performed any review of the contents of the Prospectus.
Unless
otherwise specified in the applicable Prospectus Supplement, each series or issue of Securities (other than Common Shares and
Listed Warrants) will not be listed on any securities exchange. Accordingly, there is currently no market through which the Securities
(other than Common Shares and Listed Warrants) may be sold and purchasers may not be able to resell such Securities purchased
under this Prospectus. This may affect the pricing of such Securities in the secondary market, the transparency and availability
of trading prices, the liquidity of such Securities and the extent of issuer regulation. See “Risk Factors”.
The
Company’s head office is located at 1030 West Georgia Street, Suite 1830, Vancouver, British Columbia V6E 2Y3, and its registered
and records office is located at 925 West Georgia Street, Suite 1000, Vancouver, British Columbia V6C 3L2.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
In
this Prospectus, unless the context otherwise requires, references to “we”, “us”, “our” or
similar terms, as well as references to “URC” or the “Company”, refer to Uranium Royalty Corp. together
with our wholly owned subsidiaries.
In
this Prospectus, “U3O8” means triuranium octoxide, a compound of uranium that is converted
to uranium hexafluoride for the purpose of uranium enrichment.
We
are a company incorporated under the federal laws of Canada. Our Common Shares are registered under Section 12(b) of the United
States Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our Common Shares are traded
in Canada on the TSXV under the symbol “URC” and in the United States on the Nasdaq under the symbol “UROY”.
This
Prospectus is a base shelf prospectus that:
|
● |
we
have filed with the securities commissions in each of the provinces and territories of Canada, (the “Canadian Qualifying
Jurisdictions”) in order to qualify the offering of the Securities described in this Prospectus in accordance with
NI 44-102; and |
|
|
|
|
● |
forms
part of a registration statement on Form F-10 (the “Registration Statement”) that we filed with SEC under
the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) under the Multilateral
Jurisdiction Disclosure System between Canada and the United States. |
Under
this shelf registration process, we may sell any combination of the Securities described in this Prospectus in one or more offerings
up to a total aggregate offering price of $130,000,000. This Prospectus provides you with a general description of the Securities
that we may offer. Each time we sell Securities under this Prospectus we will provide a Prospectus Supplement that will contain
specific information about the terms of that specific offering. The specific terms of the Securities in respect of which this
Prospectus is being delivered will be set forth in the Prospectus Supplement.
You
should rely only on the information contained in or incorporated by reference into this Prospectus and in any applicable Prospectus
Supplement. The Company has not authorized anyone to provide you with different information. The Company is not making any offer
of these Securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained
in this Prospectus and any Prospectus Supplement is accurate as of any date other than the date on the front of those documents
or that any information contained in any document incorporated by reference is accurate as of any date other than the date of
that document.
This
Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted
in accordance with the rules and regulations of the SEC, or the schedules or exhibits that are part of the Registration Statement.
Investors in the United States should refer to the Registration Statement and the exhibits thereto for further information with
respect to the Company and the Securities.
CURRENCY
PRESENTATION AND EXCHANGE RATE INFORMATION
The
financial statements of the Company incorporated by reference in this Prospectus are reported in Canadian dollars. In this Prospectus,
all dollar amounts referenced, unless otherwise indicated, are expressed in Canadian dollars and are referred to as “$”
or “C$”. United States dollars are referred to as “US$”.
The
high, low, average and closing exchange rates for United States dollars in terms of the Canadian dollar for each of the indicated
periods, as quoted by the Bank of Canada, were as follows:
| |
Year ended April 30 (C$) | |
| |
| 2020 | | |
| 2019 | | |
| 2018 | |
High | |
| 1.4496 | | |
| 1.3642 | | |
| 1.3743 | |
Low | |
| 1.2970 | | |
| 1.2775 | | |
| 1.2128 | |
Average | |
| 1.3365 | | |
| 1.3172 | | |
| 1.2782 | |
Closing | |
| 1.3910 | | |
| 1.3423 | | |
| 1.2836 | |
| |
Three months ended January 31 (C$) | |
| |
2021 | | |
2020 | |
| |
| | |
| |
High | |
| 1.3257 | | |
| 1.3307 | |
Low | |
| 1.2627 | | |
| 1.2970 | |
Average | |
| 1.2866 | | |
| 1.3163 | |
Closing | |
| 1.2780 | | |
| 1.3233 | |
On
June 15, 2021, the daily average exchange rate provided by the Bank of Canada in terms of the United States dollar was US$1.00
= C$1.2188.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING INFORMATION
This
Prospectus and the documents incorporated by reference herein contain “forward-looking information” within the meaning
of applicable Canadian securities laws and “forward-looking statements” within the meaning of securities laws in the
United States (collectively, “Forward-Looking Statements”). These statements relate to the expectations of
management about future events, results of operations and the Company’s future performance (both operational and financial)
and business prospects. All statements other than statements of historical fact are Forward-Looking Statements. The use of any
of the words “anticipate”, “plan”, “contemplate”, “continue”, “estimate”,
“expect”, “intend”, “propose”, “might”, “may”, “will”,
“shall”, “project”, “should”, “could”, “would”, “believe”,
“predict”, “forecast”, “target”, “aim”, “pursue”, “potential”,
“objective” and “capable” and the negative of these terms or other similar expressions are generally indicative
of Forward-Looking Statements. These statements involve known and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those anticipated in such Forward-Looking Statements. No assurance can be given
that these expectations will prove to be correct and such Forward-Looking Statements should not be unduly relied on. These statements
speak only as of the date hereof. In addition, this Prospectus may contain Forward-Looking Statements attributed to third party
industry sources. Without limitation, this Prospectus contains Forward-Looking Statements pertaining to the following: use of
funds; the potential benefits of recent acquisitions; the impacts of the novel coronavirus (“COVID-19”) on
the business of the Company and the operators of the projects underlying its projects the ongoing operation of the properties
in which the Company holds or may hold uranium interests; statements with respect to future events or future performance; the
impact of general business and economic conditions; future debt levels, financial capacity, liquidity and capital resources; anticipated
future sources of funds to meet working capital requirements; future capital expenditures and contractual commitments; expectations
respecting future financial results; expectations with respect to the Company’s financial position; expectations regarding
the Company’s growth and results of operations; the Company’s dividend policy; conditions, trends and practices pertaining
to the uranium industry and other industries in which uranium is used; the financial and operational strength of counterparties;
production volumes; mineral resources and mine life; governmental regulatory regimes with respect to environmental matters; and
governmental taxation regimes.
Forward-Looking
Statements are based on a number of material assumptions, including those listed here, which could prove to be significantly incorrect:
the anticipated impact of completed acquisitions on the Company’s business; market prices of uranium; global economic and
financial conditions; demand for uranium; uranium supply; industry conditions; the impacts of COVID-19 on the business of the
Company and the operators of the projects underlying its interests; the ongoing operation of the properties in which the Company
holds or may hold uranium interests; and the accuracy of public statements and disclosure made by the owners or operators of the
properties underlying the Company’s interests.
Actual
results could differ materially from those anticipated in these Forward-Looking Statements due to a variety of risks, uncertainties
and other factors, including, without limitation, those referred to in this Prospectus under the heading “Risk Factors”
and in the Company’s Annual Information Form, including the following:
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● |
dependence
on third party operators; |
|
● |
the
Company has limited or no access to data or the operations underlying its interests; |
|
● |
risks
faced by owners and operators of the properties underlying the Company’s interest, including title, permit or licensing
disputes related to any of the properties in which the Company holds or may hold royalties, streams or similar interests; |
|
● |
the
Company is dependent on future payments from owners and operators of its royalty and other interests; |
|
● |
volatility
in market prices and demand for uranium and the market price of the Company’s other investments; |
|
● |
risks
related to epidemics, pandemics and other health crises including COVID-19; |
|
● |
fluctuations
in the market prices of the Company’s investments; |
|
● |
commodities
price risks; |
|
● |
risks
associated with future acquisitions; |
|
● |
changes
in general economic, financial, market and business conditions in the industries in which uranium is used; |
|
● |
risks
related to mineral reserve and mineral resource estimates, including rate and timing of production differences from resource
and reserve estimates; |
|
● |
the
impact of project costs on profit based royalties, such as NPIs (as defined herein); |
|
● |
risks
related to the public acceptance of nuclear energy in relation to other energy sources; |
|
● |
alternatives
to and changing demand for uranium; |
|
● |
the
absence of any public market for uranium; |
|
● |
changes
in the technologies pertaining to the use of uranium; |
|
● |
changes
in legislation, including permitting and licensing regimes and taxation policies; |
|
● |
risks
relating to buy-back and similar rights held by the operators of the Company’s interests; |
|
● |
royalties,
streams and similar interests may not be honoured by operators of a project; |
|
● |
any
inability of the Company to obtain necessary financing when required on acceptable terms or at all; |
|
● |
risks
related to the competitive nature of the royalty and streaming business; |
|
● |
regulations
and political or economic developments in any of the jurisdictions where properties in which the Company holds or may hold
royalties, streams or similar interests are located; |
|
● |
risks
related to interest rate fluctuations and foreign exchange rate fluctuations; |
|
● |
any
inability of the Company to execute its growth strategy; |
|
● |
any
inability to attract and retain key employees; |
|
● |
litigation; |
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● |
risks
associated with First Nations land claims; |
|
● |
potential
conflicts of interests; |
|
● |
any
inability to ensure compliance with anti-bribery and anti-corruption laws; |
|
● |
any
future expansion of the Company’s business activities; |
|
● |
any
failure to maintain effective internal controls; and |
|
● |
the
other factors discussed under “Risk Factors” herein and in the Annual Information Form. |
Should
one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may
vary materially from those described in forward-looking information. Forward-looking information is based on management’s
beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking
information if these beliefs, estimates and opinions or other circumstances should change, other than as required by applicable
laws. Investors are cautioned against attributing undue certainty to forward-looking information.
The
risk factors referenced herein should not be construed as exhaustive. Except as required under applicable laws, we undertake no
obligation to update or revise any Forward-Looking Statements. An investment in the Company is speculative and involves a high
degree of risk due to the nature of our business and the present state of our projects and interests.
Please
carefully consider the risk factors set out herein under “Risk Factors” and in the Annual Information Form.
NOTE
REGARDING RESOURCE AND RESERVE ESTIMATES
This
Prospectus and the documents incorporated by reference, as applicable, have been prepared in accordance with the requirements
of Canadian securities laws, which differ from the requirements of United States securities laws. Unless otherwise indicated,
all mineral reserve and resource estimates included in this Prospectus have been prepared for or by the current or former owners
and operators of the relevant properties, as and to the extent indicated by them, in accordance with National Instrument 43-101
– Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining,
Metallurgy and Petroleum (the “CIM”) classification system or the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC”), as applicable. In accordance
with NI 43-101, the Company uses the terms mineral reserves and resources as they are defined in accordance with the CIM Definition
Standards on Mineral Resources and Reserves as adopted by the CIM (the “CIM Definition Standards”).
The
SEC has adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose
securities are registered with the SEC under the Exchange Act. These amendments became effective February 25, 2019 (the “SEC
Modernization Rules”) with compliance required for the first fiscal year beginning on or after January 1, 2021. Under
the SEC Modernization Rules, the historical property disclosure requirements for mining registrants included in SEC Industry Guide
7 has been replaced. The Company is not required to provide disclosure on its mineral properties under the SEC Modernization Rules
and will continue to provide disclosure under NI 43-101 and the CIM Definition Standards. However, if the Company either ceases
to be a “foreign private issuer” or ceases to be entitled to file reports under the multijurisdictional disclosure
system (“MJDS”), then the Company will be required to provide disclosure on its mineral properties under the
SEC Modernization Rules. Accordingly, United States investors are cautioned that the disclosure the Company provides on its mineral
properties may be different from the disclosure that the Company would otherwise be required to provide as a U.S. domestic issuer
or a non-MJDS foreign private issuer under the SEC Modernization Rules.
The
SEC Modernization Rules include the adoption of terms describing mineral reserves and mineral resources that are substantially
similar to the corresponding terms under the CIM Definition Standards. As a result of the adoption of the SEC Modernization Rules,
the SEC will now recognize estimates of “measured mineral resources”, “indicated mineral resources” and
“inferred mineral resources”. In addition, the SEC has amended its definitions of “proven mineral reserves”
and “probable mineral reserves” to be substantially similar to the corresponding CIM Definition Standards.
United
States investors are cautioned that while terms are substantially similar to CIM Definition Standards, there are differences in
the definitions under the SEC Modernization Rules and the CIM Definition Standards. Accordingly, there is no assurance any mineral
reserves or mineral resources that the Company may report as “proven reserves”, “probable reserves”, “measured
mineral resources”, “indicated mineral resources” and “inferred mineral resources” under NI 43-101
would be the same had the Company prepared the reserve or resource estimates under the standards adopted under the SEC Modernization
Rules.
United
States investors are also cautioned that while the SEC will now recognize “measured mineral resources”, “indicated
mineral resources” and “inferred mineral resources”, investors should not assume that any part or all of the
mineralization in these categories will ever be converted into a higher category of mineral resources or into mineral reserves.
Mineralization described using these terms has a greater amount of uncertainty as to their existence and feasibility than mineralization
that has been characterized as reserves. Accordingly, investors are cautioned not to assume that any “measured mineral resources”,
“indicated mineral resources”, or “inferred mineral resources” that the Company reports are or will be
economically or legally mineable.
Further,
“inferred resources” have a greater amount of uncertainty as to their existence and as to whether they can be mined
legally or economically. In accordance with Canadian rules, estimates of “inferred mineral resources” cannot form
the basis of feasibility or other economic studies, except in limited circumstances where permitted under NI 43-101.
In
addition to NI 43-101, certain resource estimates disclosed in this Prospectus, and the documents incorporated by reference hereby,
have been prepared in accordance with JORC, which differs from the requirements of NI 43-101 and United States securities laws.
Accordingly, information contained in this short form prospectus and the portions of documents incorporated by reference herein
contain descriptions of the Company’s mineral deposits that may not be comparable to similar information made public by
U.S. companies who prepare their disclosure in accordance with U.S. federal securities laws and the rules and regulations thereunder.
TECHNICAL
AND THIRD PARTY INFORMATION
This
Prospectus, as well as the documents incorporated by reference herein, includes market information, industry data and forecasts
obtained from independent industry publications, market research and analyst reports, surveys and other publicly available sources.
Although the Company believes these sources to be generally reliable, market and industry data is subject to interpretation and
cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature
of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Accordingly, the accuracy
and completeness of this data is not guaranteed. Actual outcomes may vary materially from those forecast in such reports, surveys
or publications, and the prospect for material variation can be expected to increase as the length of the forecast period increases.
The Company has not independently verified any of the data from third party sources referred to herein nor ascertained the underlying
assumptions relied on by such sources.
Except
where otherwise stated, the disclosure herein, and in the documents incorporated by reference hereby, relating to properties underlying
the Company’s interests is based primarily on information publicly disclosed by the owners or operators of such properties,
as is customary for royalty portfolio companies of this nature. Specifically, as a royalty holder, the Company has limited, if
any, access to the properties subject to its interests. The Company generally relies on publicly available information regarding
these properties and related operations and generally has no ability to independently verify such information, and there can be
no assurance that such third party information is complete and accurate. In addition, such publicly available information may
relate to a larger property area than that covered by the Company’s interests. Additionally, the Company has, and may from
time to time, receive operating information from the owners and operators of these properties, which it is not permitted to disclose
to the public.
As
of the date of this Prospectus, the Company considers its royalty interest in the McArthur River Project, Waterbury Lake / Cigar
Lake Project and the Roughrider Project (each as described in the Annual Information Form), located in Saskatchewan, Canada as
its material properties for the purposes of NI 43-101. Information contained in this short form prospectus or incorporated by
reference herein with respect to each of such projects has been prepared in accordance with the exemption set forth in section
9.2 of NI 43-101.
Unless
otherwise indicated, the scientific and technical information contained herein or in the documents incorporated by reference regarding
McArthur River has been derived from the technical report titled “McArthur River Operation, Northern Saskatchewan, Canada,
National Instrument 43-101 Technical Report”, with an effective date of December 31, 2018, prepared for Cameco Corporation
(“Cameco”), the Cameco Annual Information Form for the year ended December 31, 2020 (the “Cameco 2020
AIF”) and Cameco’s other public disclosures, copies of which are available under its profile on SEDAR.
Unless
otherwise indicated, the scientific and technical information contained herein or in the documents incorporated by reference regarding
Waterbury Lake / Cigar Lake has been derived from the technical report titled “Cigar Lake Operation, Northern Saskatchewan,
Canada, National Instrument 43-101 Technical Report”, with an effective date of December 31, 2015, prepared for Cameco,
the Cameco 2020 AIF and Cameco’s other public disclosures, copies of which are available under its profile on SEDAR.
Unless
otherwise indicated, the scientific and technical information herein regarding the Roughrider Project has been derived from the
technical report titled “Technical Report on the Roughrider Uranium Deposit Royalty, Saskatchewan” with an effective
date of October 23, 2019, prepared for the Company by Terra Modelling Services Inc. and authored by Pieter I. Du Plessis, P.Geo.,
a copy of which is available under the Company’s profile at on SEDAR, as well as public disclosures by Rio Tinto plc.
We
have obtained certain information contained in this Prospectus concerning the industries in which we operate from publicly available
information from third party sources. We have not verified the accuracy or completeness of any information contained in such publicly
available information. In addition, we have not determined if any such third party has omitted to disclose any facts, information
or events which may have occurred prior to or subsequent to the date as of which any such information became publicly available
or which may affect the significance or accuracy of any information contained in any such information and summarized herein.
MARKETING
MATERIALS
Certain
marketing materials (as that term is defined in applicable Canadian securities legislation) may be used in connection with a distribution
of Securities under this Prospectus and the applicable Prospectus Supplement(s). Any “template version” of “marketing
materials” (as those terms are defined in applicable Canadian securities legislation) pertaining to a distribution of Securities,
and filed by the Company after the date of the Prospectus Supplement for the distribution and before termination of the distribution
of such Securities, will be deemed to be incorporated by reference in that Prospectus Supplement for the purposes of the distribution
of Securities to which the Prospectus Supplement pertains.
DOCUMENTS
INCORPORATED BY REFERENCE
Information
has been incorporated by reference into this Prospectus from documents filed with the securities commissions or similar authorities
in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Chief Financial
Officer of the Company at 1030 West Georgia Street, Suite 1830, Vancouver, British Columbia V6E 2Y3, 604-396-8222 and are also
available electronically through the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.
The filings of the Company through SEDAR are not incorporated by reference in this Prospectus except as specifically set out herein.
As
at the date hereof, the following documents of the Company, filed with the securities commissions or similar authorities in Canada,
are specifically incorporated by reference into and form an integral part of this Prospectus, provided that such documents are
not incorporated by reference to the extent that their contents are modified or superseded by a statement contained in this Prospectus
or in any other subsequently filed document that is also incorporated by reference in the Prospectus, as further described below:
|
1) |
the
annual information form of the Company for the financial year ended April 30, 2020 dated April 5, 2021 (the “Annual
Information Form”); |
|
|
|
|
2) |
the
management information circular of the Company dated October 29, 2020 regarding the annual general meeting of shareholders
of the Company held on December 16, 2020; |
|
|
|
|
3) |
the
audited annual consolidated financial statements of the Company as at and for the financial years ended April 30, 2020 and
2019, together with the notes thereto, and the auditors reports thereon(i); |
|
|
|
|
4) |
management’s
discussion and analysis of financial condition and results of operations of the Company for the financial year ended April
30, 2020 dated August 17, 2020; |
|
|
|
|
5) |
the
unaudited interim consolidated financial statements of the Company as at and for the nine months ended January 31, 2021, together
with the notes thereto (the “Interim Financial Statements”); |
|
|
|
|
6) |
management’s
discussion and analysis of financial condition and results of operations of the Company for the nine months ended January
31, 2021 dated March 31, 2021 (the “Interim MD&A”); |
|
|
|
|
7) |
the
material change report dated September 2, 2020 regarding the passing of Lady Barbara Judge, a director of the Company; |
|
8) |
the
material change report dated October 14, 2020 regarding the appointment of Neil Gregson to the board of directors of the Company; |
|
|
|
|
9) |
the
material change report dated February 19, 2021 regarding the Company entering into a definitive agreement (the “Royalty
Purchase Agreement”) between the Company, Reserve Industries Corp. and Reserve Minerals Corp. dated February 10,
2021 to acquire existing royalty interests on the McArthur River Project and Waterbury Lake / Cigar Lake Project in Saskatchewan,
Canada; |
|
|
|
|
10) |
the
material change report dated March 30, 2021, regarding the Company’s exercise of its option to acquire uranium under
the Yellow Cake Agreement (as defined herein); and |
|
|
|
|
11) |
the
material change report dated May 20, 2021, regarding the close of the Company’s public offering by way of short form
prospectus of 6,100,000 Common Shares (the “Offered Shares”) at a price of $4.10 per Offered Share for
gross proceeds of $25,010,000 (the “May Offering”). See “Recent Developments”. |
|
|
|
|
|
(i) |
The
annual consolidated financial statements of the Company as at and for the financial year ended April 30, 2019, including the
auditor’s report thereon, has been publicly filed under the Company’s profile on SEDAR and is located at Appendix
“A” – Financial Statements for the Year Ended April 30, 2019 and April 30,2018 to the Company’s long
form prospectus dated November 22, 2019. See “Auditors”. |
Any
document of the type referred to in the preceding paragraph (excluding confidential material change reports), and all other documents
of the type required to be incorporated by reference in a short form prospectus by National Instrument 44-101 –Short
Form Prospectus Distributions (“NI 44-101”) filed by the Company with a securities commission or similar
regulatory authority in Canada after the date of this Prospectus and prior to the termination of any offering of Securities hereunder
shall be deemed to be incorporated by reference into this Prospectus. In addition, to the extent that any document or information
incorporated by reference into this Prospectus is included in any report on Form 6-K, Form 40-F, Form 20-F, Form 10-K, Form 10-Q
or Form 8-K (or any respective successor form) that is filed with or furnished by the Company to the SEC after the date of this
Prospectus, that document or information shall be deemed to be incorporated by reference as an exhibit to the Registration Statement
of which this Prospectus forms a part. In addition, the Company may incorporate by reference into this Prospectus, or the Registration
Statement of which it forms a part, other information from documents filed with or furnished to the SEC pursuant to Section 13(a)
or 15(d) of the Exchange Act, if and to the extent expressly provided therein.
Any
statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference herein will be
deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained in this Prospectus
or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference into this Prospectus
modifies or supersedes that statement. The modifying or superseding statement need not state that it has modified or superseded
a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying
or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement when made,
constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required
to be stated or that is necessary to prevent a statement that is made from being false or misleading in the circumstances in which
it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute part
of this Prospectus.
Upon
a new annual information form and related annual financial statements and management’s discussion and analysis being filed
by the Company with, and where required, accepted by, the applicable securities regulatory authorities during the term of this
Prospectus: (i) the previous annual information form, the previous annual financial statements and related management’s
discussion and analysis; (ii) all interim financial statements and related management’s discussion and analysis; (iii) all
material change reports and information circulars and all Prospectus Supplements filed by the Company prior to the commencement
of the Company’s financial year in respect of which the new annual information form is filed; shall be deemed no longer
to be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder.
Upon
new interim consolidated financial statements and related management’s discussion and analysis being filed by the Company
with the applicable securities regulatory authorities in Canada during the term of this Prospectus, all interim consolidated financial
statements and related management’s discussion and analysis filed prior to the new interim consolidated financial statements
and related management’s discussion and analysis shall be deemed no longer to be incorporated by reference into this Prospectus
for purposes of future offers and sales of Securities hereunder.
Upon
a new information circular relating to an annual meeting of shareholders being filed by the Company with applicable securities
regulatory authorities in Canada subsequent to the date of this Prospectus and prior to the date on which this Prospectus ceases
to be effective, the information circular for the preceding annual meeting of shareholders and any other information circular
filed by the Company prior to the commencement of the Company’s financial year in respect of which the new annual information
form is filed shall be deemed no longer to be incorporated by reference into this Prospectus for purposes of future offers and
sales of Securities under this Prospectus.
All
information permitted under applicable securities legislation to be omitted from the Prospectus will be contained in one or more
Prospectus Supplements that will be delivered to purchasers together with the Prospectus, to the extent required by applicable
securities laws. A Prospectus Supplement containing the specific terms of any Securities offered thereunder will be deemed to
be incorporated by reference into this Prospectus as of the date of such Prospectus Supplement solely for the purposes of the
Securities offered thereunder. Investors should read the Prospectus and any applicable Prospectus Supplement carefully before
investing in the Company’s securities.
The
Company has not provided or otherwise authorized any other person to provide investors with information other than as contained
or incorporated by reference in this Prospectus or any Prospectus Supplement. If an investor is provided with different or inconsistent
information, he or she should not rely on it.
References
to our website in any documents that are incorporated by reference into this Prospectus and any Prospectus Supplement do not incorporate
by reference the information on such website into this Prospectus or any Prospectus Supplement, and we disclaim any such incorporation
by reference.
DOCUMENTS
FILED AS PART OF THE REGISTRATION STATEMENT
The
following documents have been, or will be, filed with the SEC as part of the Registration Statement of which this Prospectus forms
a part: (1) the documents listed under “Documents Incorporated by Reference”; (2) the consents of PricewaterhouseCoopers
LLP and Ernst & Young LLP; (3) powers of attorney from certain of the Company’s directors and officers; (4) the consents
of the “qualified persons” (for the purposes of NI 43-101) referred to in this Prospectus under “Interests
of Experts”; and (5) the form of indenture for any Debt Securities issued hereunder. A copy of the form of any applicable
warrant agreement, indenture, subscription receipt agreement, or statement of eligibility of trustee on Form T-1, as applicable,
will be filed by post-effective amendment or by incorporation by reference to documents filed or furnished with the SEC under
the Exchange Act.
AVAILABLE
INFORMATION
The
Company is subject to the information reporting requirements of the Exchange Act and applicable Canadian requirements and, in
accordance therewith, files reports and other information with the SEC and with securities regulatory authorities in Canada. Under
the multi-jurisdictional disclosure system adopted by the United States and Canada, such reports and other information may generally
be prepared in accordance with the disclosure requirements of Canada, which requirements are different from those of the United
States. As a foreign private issuer, the Company is exempt from the rules under the Exchange Act prescribing the furnishing and
content of proxy statements, and the Company’s officers, directors and principal shareholders are exempt from the reporting
and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. Prospective investors may read and download
any public document that the Company has filed with securities commissions or similar regulatory authorities in Canada on SEDAR
at www.sedar.com. The reports and other information filed and furnished by the Company with the SEC can be inspected on the SEC’s
website at www.sec.gov. Reports and other information filed by the Company with, or furnished to, the SEC may also be inspected
and copied for a fee at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C., 20549.
The
Company has filed with the SEC the Registration Statement under the U.S. Securities Act, with respect to the Securities. This
Prospectus, which forms part of the Registration Statement, does not contain all of the information set forth in the Registration
Statement, certain parts of which are contained in the exhibits to the Registration Statement as permitted by the rules and regulations
of the SEC. See “Documents Filed as Part of the Registration Statement”. For further information with respect
to the Company and the Securities, reference is made to the Registration Statement and the exhibits thereto. Statements contained
in or incorporated by reference into this Prospectus about the contents of any contract, agreement or other document are not necessarily
complete and, in each instance, reference is made to the copy of the document filed as an exhibit to the Registration Statement
for a complete description of the matter involved. Each such statement is qualified in its entirety by such reference. The Registration
Statement can be found on EDGAR at the SEC’s website: www.sec.gov. Each time the Company sells Securities under the Registration
Statement, it will provide a Prospectus Supplement that will contain specific information about the terms of that offering. The
Prospectus Supplement may also add, update or change information contained in this Prospectus.
DESCRIPTION
OF THE BUSINESS
The
following description of the Company is, in some instances, derived from selected information about the Company contained in the
documents incorporated by reference into this Prospectus. This description does not contain all of the information about the Company
and its properties and business that you should consider before investing in any Securities. You should carefully read the entire
Prospectus and the applicable Prospectus Supplement, as well as the documents incorporated by reference into this Prospectus and
the applicable Prospectus Supplement, including the section of the Annual Information Form titled “Risk Factors”,
before making an investment decision.
URC
is a pure-play uranium royalty company focused on gaining exposure to uranium prices by making strategic investments in uranium
interests, including royalties, streams, debt and equity investments in uranium companies, as well as through holdings of physical
uranium. For further information on the Company and its business activities, see the Annual Information Form, which is incorporated
by reference herein.
RECENT
DEVELOPMENTS
Listing
on the Nasdaq
On
April 28, 2021, the Company’s Common Shares commenced trading on the Nasdaq under the stock symbol “UROY”.
Acquisition
of Uranium under Yellow Cake Agreement
On
April 29, 2021, the Company announced that, pursuant to the completion of the exercise of its option (the “Uranium Option”)
under the terms of a subscription agreement dated June 7, 2018 (“Yellow Cake Agreement”) between the Company
and Yellow Cake plc (“Yellow Cake”) to acquire US$10.0 million ($12.4 million) of uranium from Yellow Cake,
among other things, it had acquired 348,068 pounds of U3O8 at a price of US$28.73 per pound. The acquired
U3O8 is currently held in the Company’s account at the Port Hope fuel services facilities of Cameco
in Ontario, Canada.
See
“The URC Asset Portfolio – Yellow Cake Strategic Investment and Uranium Option” in the Annual Information
Form for further information.
McArthur
River and Cigar Lake Royalty Acquisitions
On
May 7, 2021, pursuant to an amended and restated royalty purchase agreement dated effective February 10, 2021 (the “Royalty
Purchase Agreement”) with Reserve Minerals Inc. and Reserve Industries Corp. (collectively, the “Royalty Vendors”),
the Company acquired: (i) a 1% gross overriding royalty on an approximate 9% share of uranium production derived from an approximate
30.195% ownership interest of Orano Canada Inc. (“Orano”) on the McArthur River Project (the “McArthur
River Project”) located in Saskatchewan, Canada; (ii) a 10% to 20% sliding scale net profits interest (an “NPI”)
royalty on a 3.75% share of overall uranium production, drawn from Orano’s approximate 37.1% ownership interest in the Waterbury
Lake / Cigar Lake Project (the “Waterbury Lake / Cigar Lake Project”) located in Saskatchewan, Canada; and
(iii) an option to purchase the 20% NPI on a 7.5% share of overall uranium production from the project lands that comprise the
early exploration stage Dawn Lake Project, which are adjacent to portions of the Waterbury Lake / Cigar Lake Project. The royalty
rate adjusts to 10% in the future upon production of 200 Mlbs from the combined royalty lands of the Dawn Lake and Waterbury Lake
/ Cigar Lake Projects (collectively, the “Royalty Acquisitions”).
The
consideration paid by the Company under the Royalty Purchase Agreement was US$11.5 million, which
was satisfied by the Company by paying to the Royalty Vendors US$10.0 million (approximately $12.2 million) in cash and issuing
to the Royalty Vendors 970,017 Common Shares.
See
“The URC Asset Portfolio – Proposed Royalty Acquisitions” in the Annual Information Form for further
information.
The
cash portion of the consideration was partially funded through a drawdown of $6 million (US$5 million) on a margin loan facility
of up to $12 million (US$10 million) (the “BMO Credit Facility”) provided by Bank of Montreal pursuant to a
margin loan agreement entered into on May 7, 2021 (the “BMO Margin Loan Agreement”). The BMO Credit Facility
is subject to an interest rate of 3-month USD LIBOR plus 5.50% per annum and customary margin requirements, and is secured by
a pledge of all the shares of Yellow Cake held by the Company. The BMO Credit Facility matures on the earlier of: (i) May 5, 2023;
or (ii) the early payment date on which the outstanding loan amount is fully and finally paid and is subject to customary margin
requirements, with margin calls being triggered in the event, among other things, that the loan-to-value ratio is at or above
50%. The Company is currently in compliance with its covenants under the BMO Credit Facility.
Public
Offering Closed May 20, 2021
On
May 20, 2021, the Company completed the May Offering for gross proceeds of $25,010,000. The May Offering was conducted by way
of a short form prospectus dated May 18, 2021, through a syndicate of underwriters led by BMO Nesbitt Burns Inc., and included
Canaccord Genuity Corp., H.C. Wainwright & Co., LLC, TD Securities Inc. and Paradigm Capital Inc. (collectively, the “Underwriters”),
pursuant to which the Company issued a total of 6,100,000 Offered Shares at a price of C$4.10 per Offered Share (the “Offering
Price”).
Pursuant
to an underwriting agreement dated May 10, 2021, among the Company and the Underwriters, the Company granted the Underwriters
an option, exercisable at the Offering Price for a period of 30 days following the closing of the May Offering, to purchase up
to an additional 15% of number of Offered Shares sold under the May Offering to cover over-allotments, if any, and for market
stabilization purposes.
The
Company intends to use the net proceeds of the May Offering to fund future purchases of royalties, streams and similar interests
and purchases of physical uranium, and for working capital.
Uranium
Energy Corp. (“UEC”), an insider of the Company, purchased 1,000,000 Offered Shares, representing 16.39% of
the number of Offered Shares. UEC acquired such Offered Shares, on the same terms as the May Offering, in order to retain its
proportionate ownership interest in the Company. After completion of the May Offering, UEC holds approximately 18.12% of the issued
and outstanding Common Shares of the Company.
COVID-19
In
March 2020, the World Health Organization declared a global pandemic related to COVID-19. The COVID-19 pandemic is continuing
to cause significant widespread global infections and fatalities. It has also materially adversely affected global economic activity,
caused significant market volatility and resulted in numerous governments declaring emergencies and implementing measures, such
as travel bans, quarantines, business closures, shelter-in-place and other restrictions, including restrictions that impact mineral
exploration and development and mining activities in many jurisdictions. There is significant ongoing uncertainty surrounding
COVID-19 and the extent and duration of the impacts that it may have on demand and prices for uranium, on the operations of the
projects underlying the Company’s interests, on its employees and on global financial markets.
As
a result of the ongoing global COVID-19 pandemic, continuing outbreaks along with a spike in infections and fatalities in many
countries and emergence of new strains, increased levels of volatility have continued to adversely impact economies and global
financial markets. The Company cannot predict whether the resurgence in infections and fatalities or emergence of new strains
may cause governments to re-impose some or all prior or new restrictive measures, including business closures. Continuing effects
of the pandemic, including variants of the virus, could result in negative economic effects and significant negative impacts on
uranium demand and pricing, which could have a material adverse impact on the Company’s results of operations and financial
condition.
In
response to COVID-19, the Company has taken actions to augment its safety protocols, protect its employees and strengthen its
balance sheet. These measures have included instituting work from home protocols and, between May 1, 2020 and October 31, 2020,
the Company reduced management and directors’ fees to preserve resources in the face of pandemic-related economic uncertainty.
Given the nature of the Company’s operations, the pandemic has had relatively little direct impact on the Company’s
day-to-day operations. However, restrictions and measures instituted by various governments around the world have significantly
reduced the ability of the Company’s personnel and advisors to travel and visit projects in connection with the review of
potential acquisitions.
Under
the Royalty Acquisitions, the Company has agreed to acquire the Cigar Lake Royalty. In the Cameco 2020 AIF, Cameco, the operator
of the Cigar Lake mine, disclosed that in March 2020 it had announced the temporary suspension of production at Cigar Lake as
a precautionary measure due to the threat posed by the COVID-19 pandemic, which production was resumed in September 2020. It further
disclosed that it took about two weeks to achieve initial production once the mine was restarted. On December 14, 2020, Cameco
announced that it was temporarily suspending production at Cigar Lake due to increasing risks posed by the COVID-19 pandemic.
In the Cameco 2020 AIF, Cameco disclosed that its production and development plans for 2021 at Cigar Lake are uncertain as the
mine remains suspended and a restart of the operation and the production rate will be dependent on its ability to maintain safe
and stable operating protocols along with a number of other factors, including how the COVID-19 pandemic is impacting the availability
of the required workforce, how cases are trending in Saskatchewan, in particular in northern communities, and the views of the
public health authorities. Cameco announced on May 7, 2021 that production at the Cigar Lake mine had resumed, with the first
shipment of ore sent to the McClean Lake mill at the end of April. Cameco stated that they were unable to provide additional production
outlook for 2021 until the rate at which they will be able to sustainably operate the Cigar Lake mine is known. To date, the operators
of the Company’s projects underlying the Company’s other interests have not disclosed any material impact from the
COVID-19 pandemic on the projects underlying such interests. However, many of such operators have disclosed cost-cutting measures
and operational changes to protect employees, with many operators enacting remote working protocols. See “Risk Factors”
in the Annual Information Form for further information.
DESCRIPTION
OF SECURITIES
The
following is a brief summary of certain general terms and provisions of the Securities as at the date of this Prospectus. The
summary does not purport to be complete and is indicative only. The specific terms of any Securities to be offered under this
Prospectus, and the extent to which the general terms described in this Prospectus apply to such Securities, will be set forth
in the applicable Prospectus Supplement. Moreover, a Prospectus Supplement relating to a particular offering of Securities may
include terms pertaining to the Securities being offered thereunder that are not within the terms and parameters described in
this Prospectus.
Common
Shares
The
Company is authorized to issue an unlimited number of Common Shares, of which, at the date hereof, there are 82,775,255 Common
Shares issued and outstanding.
The
Common Shares are not subject to any future call or assessment, do not have any pre-emptive, conversion or redemption rights and
all have equal voting rights. There are no special rights or restrictions of any nature attached to any of the Common Shares,
all of which rank equally as to all benefits which might accrue to the holders of the Common Shares. All holders of Common Shares
(“Shareholders”) are entitled to receive a notice of, attend and vote at any meeting to be convened by the
Company. At any meeting, subject to the restrictions on joint registered owners of Common Shares, every Shareholder has one vote
for each Common Share of which such holder is the registered owner. Voting rights may be exercised in person or by proxy.
Shareholders
are entitled to share pro rata in any dividends if, as and when declared by the board of directors of the Company, in its
discretion, and such of the Company’s assets as are distributable to them on liquidation, dissolution or winding-up of the
Company. Rights pertaining to the Common Shares may only be amended in accordance with applicable corporate law.
Preferred
Shares
The
following is a brief summary of certain general terms and provisions of the Preferred Shares that may be offered pursuant to this
Prospectus. This summary does not purport to be complete. The particular terms and provisions of the Preferred Shares as may be
offered pursuant to this Prospectus will be set forth in the applicable Prospectus Supplement pertaining to such offering of Preferred
Shares, and the extent to which the general terms and provisions described below may apply to such Preferred Shares will be described
in the applicable Prospectus Supplement.
The
Preferred Shares are issuable in series. The Preferred Shares of each series rank in parity with the Preferred Shares of every
other series with respect to dividends and in the distribution of assets in the event of liquidation, dissolution or winding-up
of the Company or other distribution of assets of the Company among its shareholders for the purpose of winding-up its affairs.
The Preferred Shares are entitled to a preference over the Common Shares and any other shares ranking junior to the Preferred
Shares with respect to priority in the payment of dividends and in the distribution of assets in the event of liquidation, dissolution
or winding-up of the Company or other distribution of assets of the Company among its shareholders for the purpose of winding-up
its affairs.
The
Company’s board of directors is empowered to fix the number of Preferred Shares and the rights to be attached to the Preferred
Shares of each series, including the rate, amount or kind of dividends and any conversion, voting and redemption rights. Subject
to the Company’s by-laws and applicable law, the holders of Preferred Shares, as a class, are not entitled to receive notice
of or attend or vote at meetings of the Company’s shareholders.
Warrants
The
outstanding Warrants of the Company as of the date hereof are as follows:
Expiry Date | |
Exercise Price ($) | | |
Number Outstanding | |
December 6, 2024(1) | |
| 1.40 | | |
| 294,118 | |
December 6, 2024(2) | |
| 2.00 | | |
| 23,733,512 | |
| |
| | | |
| 24,027,630 | |
Notes
We
may issue Warrants independently or together with other Securities, and Warrants sold with other Securities may be attached to
or separate from the other Securities. Warrants may be issued directly by us to the purchasers thereof or under one or more warrant
indentures or warrant agency agreements to be entered into by us and one or more banks or trust companies acting as warrant agent.
Warrants, like other Securities that may be sold, may be listed on a securities exchange subject to exchange listing requirements
and applicable legal requirements.
The
following is a brief summary of certain general terms and provisions of the Warrants that may be offered pursuant to this
Prospectus. This summary does not purport to be complete. The particular terms and provisions of the Warrants as may be offered
pursuant to this Prospectus will be set forth in the applicable Prospectus Supplement pertaining to such offering of Warrants, and
the extent to which the general terms and provisions described below may apply to such Warrants will be described in the applicable
Prospectus Supplement. The applicable Prospectus Supplement will include details of the Warrant agreements, if any, governing the
Warrants being offered. The Warrant agent, if any, will be expected to act solely as the agent of the Company and will not assume a
relationship of agency with any holders of Warrant certificates or beneficial owners of Warrants. Warrants, like other Securities
that may be sold, maybe listed on a securities exchange subject to exchange listing requirements and applicable legal requirements.
A copy of any warrant indenture or any warrant agency agreement relating to an offering of Warrants will be filed by the Company
with the relevant securities regulatory authorities in Canada after it has been entered into by the Company and, if applicable, the
Company will file with the SEC as exhibits to the Registration Statement, or will incorporate by reference from a Report of Foreign
Private Issuer on Form 6-K that the Company files with the SEC, any warrant indenture or form of warrant describing the terms and
conditions of such Warrants that the Company is offering before the issuance of such Warrants.
Each
applicable Prospectus Supplement will set forth the terms and other information with respect to the Warrants being offered thereby,
which may include, without limitation, the following (where applicable):
|
● |
the
designation of the Warrants; |
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|
● |
the
description and aggregate number of Warrants offered and the offering price; |
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● |
the
designation, number and terms of the other Securities purchasable upon exercise of the Warrants, and procedures that will
result in the adjustment of those numbers; |
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● |
the
currency or currencies in which the Warrants will be offered; |
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● |
the
exercise price of the Warrants and the currency or currencies in which the applicable Securities may be purchased upon such
exercise; |
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● |
the
dates or periods during which the Warrants are exercisable including any “early termination” provisions; |
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● |
the
designation, number and terms of any Securities with which the Warrants are issued; |
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if
the Warrants are issued as a unit with another Security, the date on and after which the Warrants and the other Security will
be separately transferable; |
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● |
whether
such Warrants are to be issued in registered form, “book-entry only” form, non-certificated inventory system form,
bearer form or in the form of temporary or permanent global securities and the basis of exchange, transfer and ownership thereof; |
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● |
any
minimum or maximum subscription amount of Warrants; |
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the
identity of the Warrant agent; |
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whether
such Warrants will be listed on any securities exchange; |
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any
terms, procedures and limitations relating to the transferability, exchange or exercise of the Warrants; |
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whether
the Warrants will be subject to redemption and, if so, the terms of such redemption provisions; |
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certain
material U.S. and Canadian federal tax consequences of owning the Warrants; and |
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any
other material terms and conditions of the Warrants and the Securities to be issued upon exercise of the Warrants. |
The
terms and provisions of any Warrants offered under a Prospectus Supplement may differ from the terms described above, and may
not be subject to or contain any or all of the terms described above.
Prior
to the exercise of their Warrants, holders of Warrants will not have any of the rights of holders of the Securities to be received
on the exercise of the Warrants, including the right to receive payments of dividends or the right to vote such underlying Securities.
Units
The
following is a brief summary of certain general terms and provisions of the Units that may be offered pursuant to this Prospectus.
This summary does not purport to be complete. The particular terms and provisions of the Units as may be offered pursuant to this
Prospectus will be set forth in the applicable Prospectus Supplement pertaining to such offering of Units, and the extent to which
the general terms and provisions described below may apply to such Units will be described in the applicable Prospectus Supplement.
Units
may be offered separately or together with other Securities, as the case may be. Each Unit will be issued so that the holder of
the Unit is also the holder of each Security included in the Unit. Thus the holder of a Unit will have the rights and obligations
of a holder of each included Security. The Unit agreement, if any, under which a Unit is issued may provide that the Securities
comprising the Unit may not be held or transferred separately, at any time or at any time before a specified date.
Each
applicable Prospectus Supplement will set forth the terms and other information with respect to the Units being offered thereby,
which may include, without limitation, the following (where applicable):
|
● |
the
designation and aggregate number of Units offered; |
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the
price or prices, if any, at which the Units will be offered; |
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the
currency in which the Units will be offered; |
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the
designation, number and terms of the Securities comprising the Units and any agreement governing the Units; |
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whether
the Units will be issued with any other Securities and, if so, the amount and terms of these Securities; |
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any
minimum or maximum subscription amount; |
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the
date on and after which the Securities comprising the Units will be separately transferable; |
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whether
the Securities comprising the Units will be listed on any securities exchange; |
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whether
such Units and the Securities comprising the Units are to be issued in registered form, “book-entry only” form,
non-certificated inventory system form, bearer form or in the form of temporary or permanent global securities and the basis
of exchange, transfer and ownership thereof; |
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any
terms, procedures and limitations relating to the transferability, exchange or exercise of the Units and the Securities comprising
the Units; |
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certain
material U.S. and Canadian federal tax consequences of owning the Units; and |
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any
other material terms and conditions of the Units. |
The
terms and provisions of any Units offered under a Prospectus Supplement may differ from the terms described above, and may not
be subject to or contain any or all of the terms described above.
Subscription
Receipts
The
following is a brief summary of certain general terms and provisions of the Subscription Receipts that may be offered pursuant
to this Prospectus. This summary does not purport to be complete. The particular terms and provisions of the Subscription Receipts
as may be offered pursuant to this Prospectus will be set forth in the applicable Prospectus Supplement pertaining to such offering
of Subscription Receipts, and the extent to which the general terms and provisions described below may apply to such Subscription
Receipts will be described in the applicable Prospectus Supplement.
Subscription
Receipts may be offered separately or together with other Securities, as the case may be. The Subscription Receipts may be issued
under one or more subscription receipt agreements, each to be entered into between the Company and an escrow agent (the “Escrow
Agent”), which will establish the terms and conditions of the Subscription Receipts. Each Escrow Agent will be a financial
institution organized under the laws of Canada or a province or territory thereof and authorized to carry on business as at trustee.
The applicable Prospectus Supplement will include details of the subscription receipt agreement, if any, governing the Subscription
Receipts being offered. The Company will file a copy of any subscription receipt agreement relating to an offering of Subscription
Receipts with the relevant securities regulatory authorities in Canada after it has been entered into by the Company. In the United
States, the Company will file as exhibits to the Registration Statement, or will incorporate by reference from Report of Foreign
Private Issuer on Form 6-K that the Company files with the SEC, any Subscription Receipt describing the terms and conditions of
subscription receipts the Company is offering before the issuance of such subscription receipts.
Each
applicable Prospectus Supplement will set forth the terms and other information with respect to the Subscription Receipts being
offered thereby, which may include, without limitation, the following (where applicable):
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the
aggregate number of Subscription Receipts offered; |
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the
price at which the Subscription Receipts will be offered; |
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the
currency in which the Subscription Receipts will be offered and whether the price is payable in installments; |
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the
terms, conditions and procedures for the conversion or exchange of the Subscription Receipts into other Securities; |
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the
dates or periods during which the Subscription Receipts may be converted or exchanged into other Securities; |
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the
designation, number and terms of the other Securities that may be issued upon exercise or deemed conversion of each Subscription
Receipt; |
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the
designation, number and terms of any other Securities with which the Subscription Receipts will be offered, if any, and the
number of Subscription Receipts that will be offered with each Security; |
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conditions
to the conversion or exchange of Subscription Receipts into Securities and the consequences of such conditions not being satisfied; |
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the
circumstances, if any, which will cause the Subscription Receipts to be deemed to be automatically converted or exchanged; |
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provisions
applicable to any escrow of the gross or net proceeds from the sale of the Subscription Receipts plus any interest or income
earned thereon, and for the release of such proceeds from such escrow; |
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the
identity of the Subscription Receipt agent; |
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whether
the Subscription Receipts will be listed on any securities exchange; |
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any
minimum or maximum subscription amount; |
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whether
such Subscription Receipts are to be issued in registered form, “book-entry only” form, non-certificated inventory
system form, bearer form or in the form of temporary or permanent global securities and the basis of exchange, transfer and
ownership thereof; |
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terms
applicable to the gross or net proceeds from the sale of the Subscription Receipts plus any interest earned thereon; |
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certain
material Canadian and United States tax consequences of owning or converting or exchanging the Subscription Receipts; and |
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any
other material terms and conditions of the Subscription Receipts. |
Prior
to the exchange of their Subscription Receipts, holders of Subscription Receipts will not have any of the rights of holders of
the Securities to be received on the exchange of the Subscription Receipts.
The
terms and provisions of any Subscription Receipts offered under a Prospectus Supplement may differ from the terms described above,
and may not be subject to or contain any or all of the terms described above.
Debt
Securities
The
following sets forth certain general terms and provisions of the Debt Securities. The particular terms and provisions of a series
of Debt Securities offered pursuant to this Prospectus will be set forth in the applicable Prospectus Supplement, and the extent
to which the general terms and provisions described below may apply to such Debt Securities, will be described in the applicable
Prospectus Supplement. The Company may issue Debt Securities, separately or together, with Common Shares, Preferred Shares, Subscription
Receipts, Warrants or Units or any combination thereof, as the case may be. The Company may issue Debt Securities and incur additional
indebtedness other than through the offering of Debt Securities pursuant to this Prospectus.
The
Debt Securities may be issued in one or more series under an indenture (the “Indenture”) to be entered into
between the Company and one or more trustees (the “Trustee”) that will be named in a Prospectus Supplement
for a series of Debt Securities. To the extent applicable, the Indenture will be subject to and governed by the United States
Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). A copy of any such trust indenture
will be filed with the relevant securities regulatory authorities in Canada after it has been entered into by the Company and
will be filed with the SEC as an exhibit to the registration statement of which this Prospectus forms a part.
Prospective
investors should read both the Prospectus and the Prospectus Supplement for a complete summary of all material terms relating
to a particular series of Debt Securities. Prospective Investors should be aware that information in the applicable Prospectus
Supplement may update and supersede the following information regarding the general material terms and provisions of the Debt
Securities. Prospective investors also should refer to the Indenture, as it may be supplemented by any supplemental indenture,
for a complete description of all terms relating to the Debt Securities.
The
Indenture will not limit the aggregate principal amount of Debt Securities that we may issue under the Indenture and will not
limit the amount of other indebtedness that we may incur. The Indenture will provide that we may issue Debt Securities from time
to time in one or more series and may be denominated and payable in U.S. dollars, Canadian dollars or any foreign currency. Unless
otherwise indicated in the applicable Prospectus Supplement, the Debt Securities will be unsecured obligations of the Company.
The Indenture will also permit us to increase the principal amount of any series of the Debt Securities previously issued and
to issue that increased principal amount.
The
description of certain provisions of the Indenture in this section do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, the provisions of the Indenture. Terms used in this summary that are not otherwise defined
herein have the meaning ascribed to them in the Indenture. The particular terms relating to Debt Securities offered by a Prospectus
Supplement will be described in the related Prospectus Supplement. The description in any such Prospectus Supplement may include,
but may not be limited to, any of the following, if applicable:
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the
specific designation of the Debt Securities; |
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any
limit on the aggregate principal amount of the Debt Securities; |
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the
date or dates, if any, on which the Debt Securities will mature and the portion (if less than all of the principal amount)
of the Debt Securities to be payable upon declaration of acceleration of maturity; |
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the
rate or rates (whether fixed or variable) at which the Debt Securities will bear interest, if any, the date or dates from
which any such interest will accrue and on which any such interest will be payable and the record dates for any interest payable
on the Debt Securities that are in registered form; |
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whether
and under what circumstances we will be required to pay any additional amounts for withholding or deduction for Canadian taxes
with respect to the Debt Securities, and whether and on what terms we will have the option to redeem the Debt Securities rather
than pay the additional amounts; |
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the
terms and conditions under which we may be obligated to redeem, repay or purchase the Debt Securities pursuant to any sinking
fund or analogous provisions or otherwise; |
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the
terms and conditions upon which we may redeem the Debt Securities, in whole or in part, at our option; |
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the
covenants applicable to the Debt Securities; |
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the
terms and conditions for any conversion or exchange of the Debt Securities for any other Securities; |
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the
extent and manner, if any, to which payment on or in respect of the Debt Securities of the series will be senior or will be
subordinated to the prior payment of other liabilities and obligations of the Company; |
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whether
the Debt Securities will be secured or unsecured; |
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whether
the Debt Securities will be issuable in registered form or bearer form or both, and, if issuable in bearer form, the restrictions
as to the offer, sale and delivery of the Debt Securities which are in bearer form and as to exchanges between registered
form and bearer form; |
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whether
the Debt Securities will be issuable in the form of registered global securities (“Global Securities”),
and, if so, the identity of the depositary for such registered Global Securities; |
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the
denominations in which registered Debt Securities will be issuable, if other than denominations of $1,000, integral multiples
of $1,000 and the denominations in which bearer Debt Securities will be issuable, if other than $5,000; |
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each
office or agency where payments on the Debt Securities will be made and each office or agency where the Debt Securities may
be presented for registration of transfer or exchange; |
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if
other than United States dollars, the currency in which the Debt Securities are denominated or the currency in which we will
make payments on the Debt Securities; |
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material
Canadian federal income tax consequences and United States federal income tax consequences of owning the Debt Securities; |
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any
index, formula or other method used to determine the amount of payments of principal of (and premium, if any) or interest,
if any, on the Debt Securities; |
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any
changes or additions to, or deletions of, events of default or covenants whether or not such events of default or covenants
are consistent with the events of default or covenants in the Indenture; |
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the
applicability of, and any changes or additions to, the provisions for defeasance described under “Defeasance”
below; |
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whether
the holders of any series of Debt Securities have special rights if specified events occur; and |
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any
other terms, conditions, rights or preferences of the Debt Securities which apply solely to the Debt Securities. |
If
we denominate the purchase price of any of the Debt Securities in a currency or currencies other than United States dollars or
a non-United States dollar unit or units, or if the principal of and any premium and interest on any Debt Securities is payable
in a currency or currencies other than United States dollars or a non-United States dollar unit or units, we will provide investors
with information on the restrictions, elections, general tax considerations, specific terms and other information with respect
to that issue of Debt Securities and such non-United States dollar currency or currencies or non-United States dollar unit or
units in the applicable Prospectus Supplement.
Each
series of Debt Securities may be issued at various times with different maturity dates, may bear interest at different rates and
may otherwise vary.
The
terms on which a series of Debt Securities may be convertible into or exchangeable for Common Shares or other securities of the
Company will be described in the applicable Prospectus Supplement. These terms may include provisions as to whether conversion
or exchange is mandatory, at the option of the holder or at the option of the Company, and may include provisions pursuant to
which the number of Common Shares or other securities to be received by the holders of such series of Debt Securities would be
subject to adjustment.
To
the extent any Debt Securities are convertible into Common Shares or other securities of the Company, prior to such conversion
the holders of such Debt Securities will not have any of the rights of holders of the securities into which the Debt Securities
are convertible, including the right to receive payments of dividends or the right to vote such underlying securities.
Guarantees
Our
payment obligations under any series of Debt Securities may be guaranteed by certain of our direct or indirect subsidiaries. In
order to comply with certain registration statement form requirements under U.S. law, these guarantees may in turn be guaranteed
by the Company. The terms of such guarantees will be set forth in the applicable Prospectus Supplement.
Ranking
and Other Indebtedness
Unless
otherwise indicated in an applicable Prospectus Supplement, and except to the extent prescribed by law, each such series of Debt
Securities shall be senior, unsubordinated and unsecured obligations of the Company and shall rank pari passu and ratably
without preference among themselves and pari passu with all other senior, unsubordinated and unsecured obligations of the
Company. The Debt Securities will be structurally subordinated to all existing and future liabilities, including trade payable
and other indebtedness, of our subsidiaries.
Our
Board of Directors may establish the extent and manner, if any, to which payment on or in respect of a series of Debt Securities
will be senior, senior subordinated or will be subordinated to the prior payment of the Company’s other liabilities and
obligations, and whether the payment of principal, premium, if any, and interest, if any, will be guaranteed by any other person
and the nature and priority of any security.
Debt
Securities in Global Form
The
Depositary and Book-Entry
Unless
otherwise specified in the applicable Prospectus Supplement, a series of the Debt Securities may be issued in whole or in part
in global form as a “global security” and will be registered in the name of or issued in bearer form and be deposited
with a depositary, or its nominee, each of which will be identified in the applicable Prospectus Supplement relating to that series.
Unless otherwise permitted by the terms of the Indenture or until exchanged, in whole or in part, for the Debt Securities in definitive
registered form, a global security may not be transferred except as a whole by the depositary for such global security to a nominee
of the depositary, by a nominee of the depositary to the depositary or another nominee of the depositary or by the depositary
or any such nominee to a successor of the depositary or a nominee of the successor.
The
specific terms of the depositary arrangement with respect to any portion of a particular series of the Debt Securities to be represented
by a global security will be described in the applicable Prospectus Supplement relating to such series. The Company anticipates
that the provisions described in this section will apply to all depositary arrangements.
Upon
the issuance of a global security, the depositary therefor or its nominee will credit, on its book entry and registration system,
the respective principal amounts of the Debt Securities represented by the global security to the accounts of such persons, designated
as “participants”, having accounts with such depositary or its nominee. Such accounts shall be designated by the underwriters,
dealers or agents participating in the distribution of the Debt Securities or by the Company if such Debt Securities are offered
and sold directly by the Company. Ownership of beneficial interests in a global security will be limited to participants or persons
that may hold beneficial interests through participants. Ownership of beneficial interests in a global security will be shown
on, and the transfer of that ownership will be effected only through, records maintained by the depositary therefor or its nominee
(with respect to interests of participants) or by participants or persons that hold through participants (with respect to interests
of persons other than participants). The law of some states in the United States may require that certain purchasers of securities
take physical delivery of such securities in definitive form.
So long as the depositary for a global security or its nominee is the registered owner of the global security or holder of a
global security in bearer form, such depositary or such nominee, as the case may be, will be considered the sole owner or
holder of the Debt Securities represented by the global security for all purposes under the Indenture. Except as provided
below, owners of beneficial interests in a global security will not be entitled to have a series of the Debt Securities
represented by the global security registered in their names, will not receive or be entitled to receive physical delivery of
such series of the Debt Securities in definitive form and will not be considered the owners or holders thereof under the
Indenture.
Any
payments of principal, premium, if any, and interest, if any, on global securities registered in the name of a depositary or securities
registrar will be made to the depositary or its nominee, as the case may be, as the registered owner of the global security representing
such Debt Securities. None of the Company, any trustee or any paying agent for the Debt Securities represented by the global securities
will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial
ownership interests of the global security or for maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The
Company expects that the depositary for a global security and its nominee, upon receipt of any payment of principal, premium,
if any, or interest, if any, will credit participants’ accounts with payments in amounts proportionate to their respective
beneficial interests in the principal amount of the global security as shown on the records of such depositary or its nominee.
The Company also expects that payments by participants to owners of beneficial interests in a global security held through such
participants will be governed by standing instructions and customary practices, as is now the case with securities held for the
accounts of customers registered in “street name”, and will be the responsibility of such participants.
Discontinuation
of Depositary’s Services
If
a depositary for a global security representing a particular series of the Debt Securities is at any time unwilling or unable
to continue as depositary or, if at any time the depositary for such series shall no longer be registered or in good standing
under the Exchange Act, and a successor depositary is not appointed by us within 90 days, the Company will issue such series of
the Debt Securities in definitive form in exchange for a global security representing such series of the Debt Securities. If an
event of default under the Indenture has occurred and is continuing, Debt Securities in definitive form will be printed and delivered
upon written request by the holder to the appropriate trustee. In addition, the Company may at any time and in the Company’s
sole discretion determine not to have a series of the Debt Securities represented by a global security and, in such event, will
issue a series of the Debt Securities in definitive form in exchange for all of the global securities representing that series
of Debt Securities.
Debt
Securities in Definitive Form
A
series of the Debt Securities may be issued in definitive form, solely as registered securities, solely as unregistered securities
or as both registered securities and unregistered securities. Registered securities will be issuable in denominations of $1,000
and integral multiples of $1,000 and unregistered securities will be issuable in denominations of $5,000 and integral multiples
of $5,000 or, in each case, in such other denominations as may be set out in the terms of the Debt Securities of any particular
series. Unless otherwise indicated in the applicable Prospectus Supplement, unregistered securities will have interest coupons
attached.
Unless
otherwise indicated in the applicable Prospectus Supplement, payment of principal, premium, if any, and interest, if any, on the
Debt Securities in definitive form will be made at the office or agency designated by the Company, or at the Company’s option
the Company can pay principal, interest, if any, and premium, if any, by check mailed to the address of the person entitled at
the address appearing in the security register of the trustee or electronic funds wire transfer to an account of persons who meet
certain thresholds set out in the Indenture who are entitled to receive payments by wire transfer. Unless otherwise indicated
in the applicable Prospectus Supplement, payment of interest, if any, will be made to the persons in whose name the Debt Securities
are registered at the close of business on the day or days specified by the Company.
At
the option of the holder of Debt Securities, registered securities of any series will be exchangeable for other registered securities
of the same series, of any authorized denomination and of a like aggregate principal amount/ If, but only if, provided in an applicable
Prospectus Supplement, unregistered securities (with all unmatured coupons, except as provided below, and all matured coupons
in default) of any series may be exchanged for registered securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor. In such event, unregistered securities surrendered in a permitted exchange for registered
securities between a regular record date or a special record date and the relevant date for payment of interest shall be surrendered
without the coupon relating to such date for payment of interest, and interest will not be payable on such date for payment of
interest in respect of the registered security issued in exchange for such unregistered security, but will be payable only to
the holder of such coupon when due in accordance with the terms of the Indenture. Unless otherwise specified in an applicable
Prospectus Supplement, unregistered securities will not be issued in exchange for registered securities.
The
applicable Prospectus Supplement may indicate the places to register a transfer of Debt Securities in definitive form. Service
charges may be payable by the holder for any registration of transfer or exchange of the Debt Securities in definitive form, and
the Company may, in certain instances, require a sum sufficient to cover any tax or other governmental charges payable in connection
with these transactions.
We
shall not be required to:
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issue,
register the transfer of or exchange any series of the Debt Securities in definitive form during a period beginning at the
opening of 15 days before any selection of securities of that series of the Debt Securities to be redeemed and ending on the
relevant date of notice of such redemption, as provided in the Indenture; |
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register
the transfer of or exchange any registered security in definitive form, or portion thereof, called for redemption, except
the unredeemed portion of any registered security being redeemed in part; |
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exchange
any unregistered security called for redemption except to the extent that such unregistered security may be exchanged for
a registered security of that series and like tenor; provided that such registered security will be simultaneously surrendered
for redemption; or |
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issue,
register the transfer of or exchange any of the Debt Securities in definitive form which have been surrendered for repayment
at the option of the holder, except the portion, if any, of such Debt Securities not to be so repaid. |
Provision
of Financial Information
In
the event that the Company is not required to remain subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to
rules and regulations promulgated by the SEC, it shall continue to file with the SEC and provide the trustee:
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within
140 days after the end of each fiscal year, annual reports on Form 20-F, 40-F, or Form 10-K, as applicable (or any successor
form), containing audited financial statements and the other financial information required to be contained therein (or required
in such successor form); and |
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within
60 days after the end of each of the first three fiscal quarters of each fiscal year, reports on Form 6-K or Form 10-Q (or
any successor form), containing unaudited financial statements and the other financial information which, regardless of applicable
requirements shall, at a minimum, contain such information required to be provided in quarterly reports under the laws of
Canada or any province thereof to security holders of a corporation with securities listed on the TSX, whether or not the
Company has any of its securities so listed. |
Events
of Default
Unless
otherwise specified in the applicable Prospectus Supplement relating to a particular series of Debt Securities, the following
is a summary of events which will, with respect to any series of the Debt Securities, constitute an event of default under the
Indenture with respect to the Debt Securities of that series:
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the
Company fails to pay principal of, or any premium on any Debt Security of that series when it is due and payable; |
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the
Company fails to pay interest payable on any Debt Security of that series when it becomes due and payable, and such default
continues for 30 days; |
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the
Company fails to make any required sinking fund or analogous payment when due for that series of Debt Securities; |
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the
Company fails to observe or perform any of its covenants or agreements in the Indenture that affect or are applicable to the
Debt Securities of that series for 90 days after written notice to the Company by the trustees or to the Company and the trustees
by holders of at least 25% in aggregate principal amount of the outstanding Debt Securities of that series; |
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certain
events involving the Company’s bankruptcy, insolvency or reorganization; and |
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any
other event of default provided for in that series of Debt Securities. |
A
default under one series of Debt Securities will not necessarily be a default under another series. A trustee may withhold notice
to the holders of the Debt Securities of any default, except in the payment of principal or premium, if any, or interest, if any,
if in good faith it considers it in the interests of the holders to do so and so advises the Company in writing.
If
an event of default for any series of Debt Securities occurs and continues (other than a bankruptcy-related event of default),
a trustee or the holders of at least 25% in aggregate principal amount of the Debt Securities of that series may require the Company
to repay immediately:
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entire principal and interest of the Debt Securities of the series; or |
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if
the Debt Securities are discounted securities, that portion of the principal as described in the applicable Prospectus Supplement. |
If
an event of default relates to events involving the Company’s bankruptcy, insolvency or reorganization, the principal of
all Debt Securities will become immediately due and payable without any action by the trustee or any holder.
Subject
to certain conditions, the holders of a majority of the aggregate principal amount of the Debt Securities of the affected series
can rescind and annul an accelerated payment requirement. If Debt Securities are discounted securities, the applicable Prospectus
Supplement will contain provisions relating to the acceleration of maturity of a portion of the principal amount of the discounted
securities upon the occurrence or continuance of an event of default.
Other
than its duties in case of a default, a trustee is not obligated to exercise any of the rights or powers that it will have under
the Indenture at the request or direction of any holders, unless the holders offer the trustee reasonable security or indemnity.
If they provide this reasonable security or indemnity, the holders of a majority in aggregate principal amount of any series of
Debt Securities may, subject to certain limitations, direct the time, method and place of conducting any proceeding for any remedy
available to a trustee, or exercising any trust or power conferred upon a trustee, for any series of Debt Securities.
The
Company will be required to furnish to the trustees a statement annually as to its compliance with all conditions and covenants
under the Indenture and, if the Company is not in compliance, the Company must specify any defaults.
No
holder of a Debt Security of any series will have any right to institute any proceeding with respect to the Indenture, or for
the appointment of a receiver or a trustee, or for any other remedy, unless:
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holder has previously given to the trustees written notice of a continuing event of default with respect to the Debt Securities
of the affected series; |
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the
holders of at least 25% in principal amount of the outstanding Debt Securities of the series affected by an event of default
have made a written request, and the holders have offered reasonable indemnity, to the trustees to institute a proceeding
as trustees; and |
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the
trustees have failed to institute a proceeding, and have not received from the holders of a majority in aggregate principal
amount of the outstanding Debt Securities of the series affected by an event of default a direction inconsistent with the
request, within 60 days after receipt of the holders’ notice, request and offer of indemnity. |
However,
such above-mentioned limitations do not apply to a suit instituted by the holder of a Debt Security for the enforcement of payment
of the principal of or any premium, if any, or interest on such Debt Security on or after the applicable due date specified in
such Debt Security.
Defeasance
When
the Company uses the term “defeasance”, it means discharge from certain obligations (other than obligations that survive
such defeasance, as specified in the Indenture) with respect to any Debt Securities of or within a series under the Indenture.
Unless otherwise specified in the applicable Prospectus Supplement, if the Company deposits with a trustee cash, government securities
or a combination thereof sufficient to pay the principal, interest, if any, premium, if any, and any other sums due to the stated
maturity date or a redemption date of the Debt Securities of a series, then at the Company’s option:
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the
Company will be discharged from the obligations with respect to the Debt Securities of that series; or |
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the
Company will no longer be under any obligation to comply with certain restrictive covenants under the Indenture and certain
events of default will no longer apply to the Company. |
If
this happens, the holders of the Debt Securities of the affected series will not be entitled to the benefits of the Indenture
except for registration of transfer and exchange of Debt Securities and the replacement of lost, stolen, destroyed or mutilated
Debt Securities. These holders may look only to the deposited fund for payment on their Debt Securities.
To
exercise the defeasance option, the Company must deliver to the trustees:
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an
opinion of counsel in the United States to the effect that the holders of the outstanding Debt Securities of the affected
series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of a defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case
if the defeasance had not occurred; |
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an
opinion of counsel in Canada or a ruling from the Canada Revenue Agency to the effect that the holders of the outstanding
Debt Securities of the affected series will not recognize income, gain or loss for Canadian federal, provincial or territorial
income or other tax purposes as a result of a defeasance and will be subject to Canadian federal, provincial or territorial
income tax and other tax on the same amounts, in the same manner and at the same times as would have been the case had the
defeasance not occurred; and |
|
|
|
|
● |
a
certificate of one of the Company’s officers and an opinion of counsel, each stating that all conditions precedent provided
for relating to defeasance have been complied with. |
If
the Company is to be discharged from its obligations with respect to the Debt Securities and not just from the Company’s
covenants, the U.S. opinion must be based upon a ruling from or published by the United States Internal Revenue Service or a change
in law to that effect.
In
addition to the delivery of the opinions described above, the following conditions must be met before the Company may exercise
its defeasance option:
|
● |
no
event of default or event that, with the passing of time or the giving of notice, or both, shall constitute an event of default
shall have occurred and be continuing for the Debt Securities of the affected series; |
|
|
|
|
● |
the
Company is not an “insolvent person” within the meaning of applicable bankruptcy and insolvency legislation; and |
|
|
|
|
● |
other
customary conditions precedent are satisfied. |
Modification
and Waiver
Modifications
and amendments of the Indenture may be made by the Company and the trustees pursuant to one or more Supplemental Indentures (a
“Supplemental Indenture”) with the consent of the holders of at least a majority in aggregate principal amount
of the outstanding Debt Securities of each series affected by the modification. However, without the consent of each holder affected,
no such modification may:
|
● |
change
the stated maturity of the principal of, premium, if any, or any instalment of interest, if any, on any Debt Security; |
|
|
|
|
● |
reduce
the principal, premium, if any, or rate of interest, if any, or change any obligation of the Company to pay any additional
amounts; |
|
|
|
|
● |
reduce
the amount of principal of a debt security payable upon acceleration of its maturity or the amount provable in bankruptcy; |
|
|
|
|
● |
change
the place or currency of any payment; |
|
|
|
|
● |
affect
the holder’s right to require the Company to repurchase the Debt Securities at the holder’s option; |
|
|
|
|
● |
impair
the right of the holders to institute a suit to enforce their rights to payment; |
|
|
|
|
● |
adversely
affect any conversion or exchange right related to a series of Debt Securities; |
|
|
|
|
● |
reduce
the percentage of Debt Securities required to modify the Indenture or to waive compliance with certain provisions of the Indenture;
or |
|
|
|
|
● |
reduce
the percentage in principal amount of outstanding Debt Securities necessary to take certain actions. |
The
holders of at least a majority in principal amount of outstanding Debt Securities of any series may on behalf of the holders of
all Debt Securities of that series waive, insofar as only that series is concerned, past defaults under the Indenture and compliance
by the Company with certain restrictive provisions of the Indenture. However, these holders may not waive a default in any payment
or principal, premium if any, or interest on any Debt Security or compliance with a provision that cannot be modified without
the consent of each holder affected.
The
Company may modify the Indenture pursuant to a Supplemental Indenture without the consent of any holders to:
|
● |
evidence
its successor under the Indenture; |
|
|
|
|
● |
add
covenants of the Company or surrender any right or power of the Company for the benefit of holders; |
|
|
|
|
● |
add
events of default; |
|
|
|
|
● |
provide
for unregistered securities to become registered securities under the Indenture and make other such changes to unregistered
securities that in each case do not materially and adversely affect the interests of holders of outstanding Debt Securities; |
|
|
|
|
● |
establish
the forms of the Debt Securities as permitted by the Indenture; |
|
|
|
|
● |
appoint
a successor trustee under the Indenture; |
|
|
|
|
● |
add
provisions to permit or facilitate the defeasance and discharge of the Debt Securities as long as there is no material adverse
effect on the holders; |
|
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● |
cure
any ambiguity, correct or supplement any defective or inconsistent provision or make any other provisions in each case that
would not materially and adversely affect the interests of holders of outstanding Debt Securities, if any; or |
|
|
|
|
● |
change
or eliminate any provisions of the Indenture where such change takes effect when there are no Debt Securities outstanding
which are entitled to the benefit of those provisions under the Indenture. |
Governing
Law
To
the extent the Indenture is governed by the Trust Indenture Act, the Indenture and the Debt Securities will be governed and construed
in accordance with the laws of the State of New York.
The
Trustee
The
Trustee under the Indenture or its affiliates may provide banking and other services to the Company in the ordinary course of
their business.
The
Indenture will contain certain limitations on the rights of the Trustee, as long as it or any of its affiliates remains the Company’s
creditor, to obtain payment of claims in certain cases or to realize on certain property received on any claim as security or
otherwise. The Trustee and its affiliates will be permitted to engage in other transactions with the Company. If a Trustee acquires
any conflicting interest as defined in the Trust Indenture Act it must eliminate such conflict within 90 days, apply to the SEC
for permission to continue as trustee (if the Indenture has been qualified under the Trust Indenture Act) or resign.
Resignation
and Removal of Trustee
A
trustee may resign or be removed with respect to one or more series of the Debt Securities and a successor trustee may be appointed
to act with respect to such series.
Consent
to Jurisdiction and Service
Under
the Indenture, the Company will irrevocably appoint an authorized agent upon which process may be served in any suit, action or
proceeding arising out of or relating to the Debt Securities or the Indenture that may be instituted in any United States federal
or New York state court located in The City of New York, and will submit to such non-exclusive jurisdiction.
CONSOLIDATED
CAPITALIZATION
The
following table sets forth the consolidated capitalization of the Company as at January 31, 2021, the date of the Interim Financial
Statements, adjusted to give effect to the May Offering (after deduction of the Underwriting Commission and estimated expenses).
This table should be read in conjunction with the Interim Financial Statements and Interim MD&A that are incorporated by reference
in this short form prospectus:
| |
As at January 31, 2021 before giving effect to the May Offering | | |
As at January 31, 2021 after giving effect to the May Offering(1)(2) | |
| |
| | |
| |
Common Shares | |
$ | 66,845,949 | | |
$ | 102,715,517 | |
| |
| (71,835,238 Common Shares) | | |
| (82,762,155 Common Shares) | |
Warrants | |
$ | 7,076,311 | | |
$ | 6,078,986 | |
| |
| (27,897,630 warrants) | | |
| (24,040,730 warrants) | |
Notes: |
(1) |
Amounts
include the exercise of an aggregate 3,856,900 warrants subsequent to January 31, 2021 and prior to the date of May Offering. |
(2) |
Amounts
include 970,017 Common Shares issued in consideration for the Royalty Acquisitions. See “Recent Developments –
McArthur River and Cigar Lake Royalty Acquisitions “ in this Prospectus and “General Development of the
Business – Proposed McArthur River and Cigar Lake Royalty Acquisitions” in the Annual Information Form. |
Since
January 31, 2021, the Company has also drawn down $6 million (US$5 million) under the BMO Credit Facility. See “Recent
Developments – McArthur River and Cigar Lake Royalty Acquisitions”.
Other
than as described herein, there have been no material changes in the share and loan capital of the Company, on a consolidated
basis, since the date of the Interim Financial Statements.
The
applicable Prospectus Supplement will describe any material change in, and the effect of such material change on, the share and
loan capital of the Company that will result from the issuance of Securities pursuant to such Prospectus Supplement.
USE
OF PROCEEDS
The
use of proceeds from the sale of Securities will be described in the applicable Prospectus Supplement relating to a specific offering
and sale of Securities. Among other potential uses, the Company may use the net proceeds from the sale of Securities for general
corporate purposes, including funding ongoing operations and/or working capital requirements, to repay indebtedness outstanding
from time to time, for capital projects and potential for future direct or indirect acquisitions of physical uranium, royalties,
streams or similar interests.
Management
of the Company will retain broad discretion in allocating the net proceeds of any offering of Securities under this Prospectus
and the Company’s actual use of the net proceeds will vary depending on the availability and suitability of investment opportunities
and its operating and capital needs from time to time. All expenses relating to an offering of Securities and any compensation
paid to underwriting dealers or agents as the case may be, will be paid out of the proceeds from the sale of Securities, unless
otherwise stated in the applicable Prospectus Supplement.
The
Company may, from time to time, issue securities (including Securities) other than pursuant to this Prospectus.
The
Company is primarily engaged in the acquisition of uranium interests. The Company had negative operating cash flow for the year
ended April 30, 2020 and the nine months ended January 31, 2021. If the Company continues to have negative cash flow into the
future, net proceeds may need to be allocated to fund this negative cash flow. The Company anticipates it will continue to have
negative cash flow from operating activities in future periods until such time as the projects underlying its royalties or other
future uranium interests or holdings generate revenues. Future cash flows from such interests are dependent upon the underlying
projects achieving or re-commencing production. There can be no assurance that such production will ever be achieved. See “Risk
Factors – Risks Related to the Business of URC – Negative Cash Flow from Operating Activities” in the Annual
Information Form.
PRIOR
SALES
Information
in respect of the Common Shares that were issued within the previous twelve-month period, Common Shares that were issued upon
the exercise of options and restricted share rights, and in respect of the grant of options and restricted share rights will be
provided as required in any applicable Prospectus Supplement.
TRADING
PRICE AND VOLUME
The
Company’s Common Shares are listed and posted for trading on the TSXV in Canada and the Nasdaq in the United States under
the stock symbols “URC” and “UROY”, respectively. The Company’s Listed Warrants are listed on the
TSXV under the stock symbol “URC.WT”. Trading price and volume of the Common Shares and Listed Warrants will be provided
as required in each Prospectus Supplement to this Prospectus.
EARNINGS
COVERAGE RATIO
Earnings
coverage ratios will be provided as required in the applicable Prospectus Supplement(s) with respect to the issuance of Debt Securities
pursuant to this Prospectus.
PLAN
OF DISTRIBUTION
The
Company may from time to time during the 25-month period that this Prospectus, including any amendments hereto, remains effective,
offer for sale and issue up to an aggregate of $130,000,000 in Securities hereunder.
The
Company may offer and sell the Securities to or through underwriters or dealers purchasing as principals, and may also sell directly
to one or more purchasers or through agents or pursuant to applicable statutory exemptions. Each Prospectus Supplement relating
to a particular offering of Securities will identify each underwriter, dealer or agent, as the case may be, engaged by the Company
in connection with the offering and sale of the Securities, and will set forth the terms of the offering of such Securities, including,
to the extent applicable, any commission, fees, discounts or any other compensation payable to underwriters, dealers or agents
in connection with the offering, the method of distribution of the Securities, the initial issue price, the proceeds that the
Company will receive and any other material terms of the plan of distribution. If Securities sold pursuant to a Prospectus Supplement
are acquired by underwriters for their own account, they may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations
of the underwriters to purchase Securities will be subject to the conditions precedent agreed upon by the parties and the underwriters
will be obligated to purchase all Securities under that offering if any are purchased. Any initial offering price and discounts,
concessions or commissions allowed or re-allowed or paid to dealers may be changed from time to time.
In
addition, the Securities may be offered and issued in consideration for the acquisition of other businesses, assets or securities
by the Company or its subsidiaries. The consideration for any such acquisition may consist of the Securities separately, a combination
of Securities or any combination of, among other things, Securities, cash and assumption of liabilities.
The
Securities may be sold, from time to time in one or more transactions at fixed prices (which may be changed from time to time),
at market prices prevailing at the time of sale, at varying prices determined at the time of sale, at prices related to prevailing
market prices or at negotiated prices, including sales in transactions that are deemed to be “at-the-market distributions”
as defined in NI 44-102 made through the facilities of the TSXV, the Nasdaq or other existing trading markets for the Common Shares.
A description of such pricing will be disclosed in the applicable Prospectus Supplement. The price at which the Securities will
be offered and sold may vary as between purchasers and during the period of distribution of the applicable Securities. If, in
connection with the offering of Securities at a fixed price or prices, the underwriters, dealers or agents have made a bona fide
effort to sell all of the Securities at the initial offering price fixed in the applicable Prospectus Supplement, the public offering
price may be decreased and thereafter further changed, from time to time, to an amount not greater than the initial offering price
fixed in such Prospectus Supplement, in which case the compensation realized by the underwriters, dealers or agents will be decreased
by the amount that the aggregate price paid by purchasers for the Securities is less than the gross proceeds paid by the underwriters,
dealers or agents to the Company.
In
connection with the sale of the Securities, underwriters, dealers or agents may receive compensation from the Company or from
other parties, including in the form of underwriters’, dealers’ or agents’ fees, commissions or concessions.
Underwriters, dealers and agents that participate in the distribution of the Securities may be deemed to be underwriters for the
purposes of applicable Canadian securities legislation and any such compensation received by them from the Company and any profit
on the resale of the Securities by them may be deemed to be underwriting commissions.
In
connection with any offering of Securities, except as otherwise set out in a Prospectus Supplement relating to a particular offering
of Securities and other than in relation to an “at-the-market” distribution, the underwriters, dealers or agents,
as the case may be, may over-allot or effect transactions intended to fix, stabilize, maintain or otherwise affect the market
price of the Securities at a level other than those which otherwise might prevail on the open market. Such transactions may be
commenced, interrupted or discontinued at any time. No underwriter, agent or dealer involved in an “at-the-market distribution”,
as defined in NI 44-102, no affiliate of such an underwriter, agent or dealer and no person or company acting jointly or in concert
with such an underwriter, agent or dealer may in connection with such distribution, enter into any transaction that is intended
to stabilize or maintain the market price of the Securities distributed under an “at-the-market” Prospectus Supplement,
including an aggregate number or principal amount of Securities that would result in the underwriter, agent or dealer creating
an over-allotment position in the Securities.
Underwriters,
dealers or agents who participate in the distribution of the Securities may be entitled, under agreements to be entered into with
the Company, to indemnification by the Company against certain liabilities, including liabilities under the U.S. Securities Act
and Canadian securities legislation, or to contribution with respect to payments which such underwriters, dealers or agents may
be required to make in respect thereof. Such underwriters, dealers and agents may be customers of, engage in transactions with,
or perform services for, the Company in the ordinary course of business.
Unless
otherwise specified in the applicable Prospectus Supplement, each series or issue of Securities (other than Common Shares and
Listed Warrants) will be a new issue of Securities with no established trading market. Accordingly, there is currently no market
through which the Securities (other than Common Shares and Listed Warrants) may be sold and purchasers may not be able to resell
such Securities purchased under this Prospectus or any Prospectus Supplement. This may affect the pricing of such Securities in
the secondary market, the transparency and availability of trading prices, the liquidity of such Securities and the extent of
issuer regulation. Subject to applicable laws, certain dealers may make a market in the Securities (other than Common Shares and
Listed Warrants), as applicable, but will not be obligated to do so and may discontinue any market making at any time without
notice. No assurances can be given that a market for trading in Securities (other than Common Shares and Listed Warrants) of any
series or issue will develop or as to the liquidity of any such market, whether or not the Securities are listed on a securities
exchange.
CERTAIN
FEDERAL INCOME TAX CONSIDERATIONS
The
applicable Prospectus Supplement may describe certain Canadian federal income tax consequences to an investor who is a non-resident
of Canada or to an investor who is a resident of Canada of acquiring, owning and disposing of any of the Securities offered thereunder.
The applicable Prospectus Supplement may also describe certain U.S. federal income tax consequences of the acquisition, ownership
and disposition of any of the Securities offered thereunder by an initial investor who is a U.S. person (within the meaning of
the U.S. Internal Revenue Code of 1986). Investors should read the tax discussion in any Prospectus Supplement with respect
to a particular offering and consult their own tax advisors with respect to their own particular circumstances.
EXEMPTIONS
Pursuant
to a decision of the Autorité des marchés financiers dated June 1, 2021, the Company was granted a permanent exemption
from the requirement to translate into French this Prospectus as well as the documents incorporated by reference herein and any
Prospectus Supplement to be filed in relation to an “at-the-market” distribution. This exemption is granted on the
condition that this Prospectus and any Prospectus Supplement (other than in relation to an “at-the-market” distribution)
be translated into French if the Company offers Securities to Québec purchasers in connection with an offering other than
in relation to an “at-the-market” distribution.
RISK
FACTORS
Investing
in our securities is speculative and involves a high degree of risk due to the nature of our business and the present stage of
its development. The following risk factors, as well as risks currently unknown to us, could materially adversely affect our future
business, operations and financial condition and could cause them to differ materially from the estimates described in forward-looking
statements relating to the Company, or its business, property or financial results, each of which could cause purchasers of our
securities to lose part or all of their investment. The risks set out below are not the only risks we face; risks and uncertainties
not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial
condition, results of operations and prospects. In addition to the other information contained in this Prospectus, the documents
incorporated by reference herein and the applicable Prospectus Supplement, you should carefully consider the risks described below
as they relate to potential future offerings under this Prospectus, as well as the risks described under the “Risk Factors”
section of the Annual Information Form, as they relate to the business of the Company.
Negative
Cash Flow from Operations
The
Company had negative cash flow from operating activities in the fiscal periods since its incorporation. Given that the Company
has no operating revenues, and does not anticipate generating operating revenues for the foreseeable future, all expenditures
to fund operating activities must be provided by financings. There is no assurance that future financings can be completed.
No
Assurance of Active or Liquid Market
No
assurance can be given that an active or liquid trading market for the Common Shares will be sustained. If an active or liquid
market for the Common Shares fails to be sustained, the prices at which such Common Shares trade may be adversely affected. Whether
or not the Common Shares will trade at lower prices depends on many factors, including the liquidity of the Common Shares, prevailing
interest rates and the markets for similar securities, general economic conditions and the Company’s financial condition,
historic financial performance and future prospects.
There
is no public market for the Preferred Shares, Warrants, Subscription Receipts, Debt Securities or Units and, unless otherwise
specified in the applicable Prospectus Supplement, the Company does not intend to apply for listing of such Securities on any
securities exchanges. If the Preferred Shares, Warrants, Subscription Receipts, Debt Securities or Units are traded after their
initial issue, they may trade at a discount from their initial offering prices depending on prevailing interest rates (as applicable),
the market for similar securities and other factors including general economic conditions and the Company’s financial condition.
There can be no assurance as to the liquidity of the trading market for the Preferred Shares, Warrants, Subscription Receipts,
Debt Securities or Units or that a trading market for these securities will develop.
Public
Markets and Share Prices
The
market price of the Common Shares and any other Securities offered hereunder that become listed and posted for trading on the
TSXV, the Nasdaq or any other stock exchange could be subject to significant fluctuations in response to variations in the Company’s
financial results, the global economy or other factors. In addition, fluctuations in the stock market may adversely affect the
market price of the Common Shares and any other Securities offered hereunder that become listed and posted for trading on the
TSXV or any other stock exchange regardless of the financial performance of the Company. Securities markets have also experienced
significant price and volume fluctuations from time to time. In some instances, these fluctuations have been unrelated or disproportionate
to the financial performance of issuers. Market fluctuations may adversely impact the market price of the Common Shares and any
other Securities offered hereunder that become listed and posted for trading on the TSXV or any other stock exchange. There can
be no assurance of the price at which the Common Shares or any other Securities offered hereunder that become listed and posted
for trading on the TSXV, the Nasdaq or any other stock exchange will trade.
Additional
Issuances and Dilution
The
Company may issue and sell additional securities of the Company to finance its operations or future acquisitions. The Company
cannot predict the size of future issuances of securities of the Company or the effect, if any, that future issuances and sales
of securities will have on the market price of any Securities of the Company issued and outstanding from time to time. Sales or
issuances of substantial amounts of securities of the Company, or the perception that such sales could occur, may adversely affect
prevailing market prices for securities of the Company issued and outstanding from time to time. With any additional sale or issuance
of securities of the Company, holders will suffer dilution with respect to voting power and may experience dilution in the Company’s
earnings per share. Moreover, this Prospectus may create a perceived risk of dilution resulting in downward pressure on the price
of the Company’s issued and outstanding Common Shares, which could contribute to progressive declines in the prices of such
securities.
Discretion
Concerning the Use of Proceeds
Our
management will have substantial discretion concerning the use of proceeds of an offering under any Prospectus Supplement as well
as the timing of the expenditure of the proceeds thereof. As a result, investors will be relying on the judgment of management
as to the specific application of the proceeds of any offering of Securities under any Prospectus Supplement. Management may use
the net proceeds of any offering of Securities under any Prospectus Supplement in ways that an investor may not consider desirable.
The results and effectiveness of the application of the net proceeds are uncertain.
Different
Shareholder Protections between the United States and Canada
We
are organized and exist under the laws of Canada and, accordingly, are governed by the Canada Business Corporations Act
(the “CBCA”). The CBCA differs in certain material respects from laws generally applicable to United States
corporations and shareholders, including the provisions relating to interested directors, mergers and similar arrangements, takeovers,
shareholders’ suits, indemnification of directors and inspection of corporation records.
The
Company is a Foreign Private Issuer within the Meaning of the Rules under the Exchange Act, and is Exempt from Certain Provisions
Applicable to United States Domestic Public Companies
Because
we are a “foreign private issuer” under the Exchange Act, we are exempt from certain provisions of the securities
rules and regulations in the United States that are applicable to U.S. domestic issuers, including:
|
● |
the
rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the
SEC; |
|
● |
the
sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered
under the Exchange Act; |
|
● |
the
sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and
liability for insiders who profit from trades made in a short period of time; and |
|
● |
the
selective disclosure rules by issuers of material non-public information under Regulation FD. |
We
are required to file an annual report on Form 40-F with the SEC within three months of the end of each fiscal year. We do not
intend to voluntarily file annual reports on Form 10-K and quarterly reports on Form 10-Q in lieu of Form 40-F requirements. For
so long as we choose to only comply with foreign private issuer requirements, the information we are required to file with or
furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic
issuers. As a result, you may not be afforded the same protections or information which would be made available to you if you
were investing in a U.S. domestic issuer.
The
Company May Be Treated as a “Passive Foreign Investment Company” under the U.S. Internal Revenue Code, Which Could
Result in Adverse U.S. Federal Income Tax Consequences for U.S. Investors
Prospective
U.S. investors should be aware that they could be subject to certain adverse U.S. federal income tax consequences if we are classified
as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes. The determination of
whether we are a PFIC for a taxable year depends, in part, on the application of complex U.S. federal income tax rules, which
are subject to differing interpretations, and such determination will depend on the composition of our income, expenses and assets
from time to time and the nature of the activities performed by our officers and employees. Prospective U.S. investors should
consult their own tax advisors regarding the likelihood and consequences of the Company being treated as a PFIC for U.S. federal
income tax purposes, including the advisability of making certain elections that may mitigate certain possible adverse income
tax consequences but may result in an inclusion in gross income without receipt of such income.
Increased
Indebtedness
The
Company has debt service obligations under the BMO Credit Facility. The degree to which the Company is leveraged could have important
consequences to shareholders, including the ability of the Company to obtain additional financing for working capital, capital
expenditures or acquisitions on acceptable terms. The Company’s ability to make payments on its indebtedness will depend
on available cash, future cash flow, prevailing economic conditions, prevailing interest rate levels and financial, competitive,
business and other factors, many of which are beyond its control. The BMO Credit Facility is secured by a pledge of all the shares
of Yellow Cake held by the Company, which continue to represent a significant portion of the Company’s assets. In the event
of default under the facility, or upon certain triggering events relating to the market price of the Yellow Cake shares, the lender
has the right to dispose of such shares. The Company may need to refinance its indebtedness and there can be no assurance that
it will be able to do so on terms acceptable to the Company or at all. If the Company is unable to refinance its debt, or is only
able to refinance its debt on less favourable and/or more restrictive terms, there may be a material adverse effect on the Company’s
financial position, and results of operations.
ENFORCEMENT
OF JUDGEMENTS AGAINST FOREIGN PERSONS
Certain
of the Company’s directors and officers reside outside of Canada. The directors and officers named below have appointed
the following agent for service of process:
Name
of Director |
|
Name
and Address of Agent |
Scott
Melbye |
|
Sangra
Moller LLP, 1000 Cathedral Place, 925 West Georgia Street, Vancouver, British Columbia, V6C 3L2 |
|
|
|
Vina
Patel |
|
Sangra
Moller LLP, 1000 Cathedral Place, 925 West Georgia Street, Vancouver, British Columbia, V6C 3L2 |
|
|
|
Neil
Gregson |
|
Sangra
Moller LLP, 1000 Cathedral Place, 925 West Georgia Street, Vancouver, British Columbia, V6C 3L2 |
Purchasers
are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person that resides
outside of Canada, even if the party has appointed an agent for service of process.
LEGAL
MATTERS
Unless
otherwise specified in a Prospectus Supplement relating to any securities offered, certain legal matters in connection with the
Securities offered by this Prospectus will be passed upon on behalf of the Company by Sangra Moller LLP, as to Canadian legal
matters, and Haynes and Boone, LLP, as to United States legal matters.
TRANSFER
AGENT AND REGISTRAR
The
Company’s transfer agent and registrar is Computershare Investor Services Inc., 100 University Avenue, 8th Floor, Toronto,
Ontario, Canada M5J 2Y1 and 510 Burrard Street, 2nd Floor, Vancouver, British Columbia V6C 3B9.
INTEREST
OF EXPERTS
Darcy
Hirsekorn, the Company’s Chief Technical Officer, has supervised the preparation of and reviewed the technical information
incorporated by reference into this Prospectus. He holds a B.Sc. in Geology from the University of Saskatchewan, is a qualified
person as defined in NI 43-101 and is registered as a professional geoscientist in Saskatchewan.
The
scientific and technical information relating to the Roughrider Project included herein has been included in reliance on the Roughrider
Technical Report. Pieter I. Du Plessis, P.Geo., a “qualified person” as defined in NI 43-101, is the author responsible
for the preparation of the Roughrider Technical Report.
None
of the foregoing experts, nor any partner, employee or consultant of such an expert who participated in and who was in a position
to directly influence the preparation of the applicable statement, report or valuation, has, has received, or is expected to receive,
registered or beneficial interests, direct or indirect, in Common Shares or other property of the Company or any of its associates
or affiliates representing 1% or more of the outstanding Common Shares.
The
partners and associates of Sangra Moller LLP, as a group, beneficially own, directly and indirectly, less than 1% of the issued
and outstanding Common Shares of the Company or any of its associates or affiliates.
INTERESTS
OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
Other
than as described in this prospectus, no director or executive officer of the Company or any person or company that beneficially
owns, or controls or directs, directly or indirectly, more than 10% of any class or series of the Company’s outstanding
voting securities, or any of their respective associates or affiliates, had any material interest, directly or indirectly, in
any transaction with the Company since the Company’s incorporation that has materially affected or is reasonably expected
to materially affect the Company or a subsidiary of the Company.
AUDITORS
Our
financial statements as at April 30, 2020 and for the year then ended incorporated by reference into this Prospectus have been audited
by PricewaterhouseCoopers LLP, independent auditor, as indicated in their report dated August 17, 2020, which is also incorporated by
reference herein. The audited financial statements have been incorporated by reference in the Registration Statement and this Prospectus
in reliance on the report of the independent auditor, given on their authority as experts in auditing and accounting. PricewaterhouseCoopers
LLP have advised the board of directors of the Company that they are independent of the Company within the meaning of the Chartered Professional
Accountants of British Columbia Code of Professional Conduct and in accordance with the independence rules of the SEC and the Public
Company Accounting Oversight Board (United States).
Our
financial statements as at April 30, 2019 and for the year then ended incorporated by reference into this Prospectus have been
audited by Ernst & Young LLP, independent registered public accounting firm, as indicated in their report dated August 27,
2019, which is also incorporated by reference herein, and is incorporated herein in reliance upon the authority of said firm as
experts in accounting and auditing.
Effective
June 1, 2020, Ernst & Young LLP resigned as auditors of the Company, and the directors of the Company appointed PricewaterhouseCoopers
LLP as successor auditors in their place. Ernst & Young LLP was independent in accordance with the auditor’s code of
professional conduct of the Chartered Professional Accountants of British Columbia up to the date of the Notice of Change of Auditor
on June 1, 2020.
ENFORCEABILITY
OF CERTAIN CIVIL LIABILITIES
The
Company is governed by the laws of Canada and its principal place of business is outside the United States. Certain of the directors
and officers of the Company are resident outside of the United States and certain of the Company’s assets and the assets
of such persons are located outside of the United States. Consequently, it may be difficult for United States investors to effect
service of process within the United States on the Company, its directors or officers, or to realize in the United States on judgments
of courts of the United States predicated on civil liabilities under the U.S. Securities Act. Investors should not assume that
Canadian courts would enforce judgments of United States courts obtained in actions against the Company or such persons predicated
on the civil liability provisions of the United States federal securities laws or the securities or “blue sky” laws
of any state within the United States or would enforce, in original actions, liabilities against the Company or such persons predicated
on the United States federal securities or any such state securities or “blue sky” laws. A final judgment for a liquidated
sum in favour of a private litigant granted by a United States court and predicated solely upon civil liability under United States
federal securities laws would, subject to certain exceptions identified in the law of individual provinces of Canada, likely be
enforceable in Canada if the United States court in which the judgment was obtained had a basis for jurisdiction in the matter
that would be recognized by the domestic Canadian court for the same purposes. There is a significant risk that a given Canadian
court may not have jurisdiction or may decline jurisdiction over a claim based solely upon United States federal securities law
on application of the conflict of laws principles of the province in Canada in which the claim is brought.
The
Company filed with the SEC, concurrently with the Registration Statement, an appointment of agent for service of process on Form
F-X. Under the Form F-X, the Company appointed C T Corporation System, with an address at 28 Liberty Street, New York, New York
10005, as its agent for service of process in the United States in connection with any investigation or administrative proceeding
conducted by the SEC, and any civil suit or action brought against or involving the Company in a United States court arising out
of or related to or concerning the offering of Securities under the Registration Statement.
CONTRACTUAL
RIGHTS OF RESCISSION
Original
purchasers of Securities which are convertible, exchangeable or exercisable for other securities of the Company, including Subscription
Receipts and Warrants if offered separately without any other Securities, will have a contractual right of rescission against
the Company in respect of the conversion, exchange or exercise of such Securities. The contractual right of rescission will entitle
such original purchasers to receive, in addition to the amount paid on original purchase of the Subscription Receipt or Warrant,
as the case may be, the amount paid upon conversion, exchange or exercise, upon surrender of the underlying securities gained
thereby, in the event that this Prospectus, the relevant Prospectus Supplement or an amendment thereto contains a misrepresentation,
provided that: (i) the conversion, exchange or exercise takes place within 180 days of the date of the purchase of such Securities
under this Prospectus and the applicable Prospectus Supplement; and (ii) the right of rescission is exercised within 180 days
of the date of the purchase of such Securities under this Prospectus and the applicable Prospectus Supplement. This contractual
right of rescission will be consistent with the statutory right of rescission described under section 131 of the Securities
Act (British Columbia), and is in addition to any other right or remedy available to original purchasers under section 131
of the Securities Act (British Columbia) or otherwise at law.
STATUTORY
RIGHTS OF WITHDRAWAL AND RESCISSION
Unless
provided otherwise in a Prospectus Supplement, the following is a description of a purchaser’s statutory rights of withdrawal
and rescission.
Securities
legislation in certain of the provinces and territories of Canada provides purchasers with the right to withdraw from an agreement
to purchase securities. This right must be exercised within two business days after receipt or deemed receipt of a prospectus
and any amendment. In several of the provinces and territories of Canada, securities legislation further provides a purchaser
with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the prospectus and any amendment
contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revisions of the
price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s
province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s
province or territory for the particulars of these rights or consult with a legal adviser.
However,
purchasers of Securities distributed under an “at-the-market” distribution by the Company do not have the right to
withdraw from an agreement to purchase the Securities and do not have remedies of rescission or, in some jurisdictions, revisions
of the price, or damages for non-delivery of the Prospectus, Prospectus Supplement, and any amendment relating to the Securities
purchased by such purchaser because the Prospectus, Prospectus Supplement, and any amendment relating to the Securities purchased
by such purchaser will not be sent or delivered, as permitted under NI 44-102.The purchaser should refer to any applicable provisions
of the securities legislation of the purchaser’s province for the particulars of these rights or consult with a legal advisor.
Any
remedies under securities legislation that a purchaser of Securities distributed under an “at-the-market” distribution
by the Company may have against the Company or its agents for rescission or, in some jurisdictions, revisions of the price, or
damages if the Prospectus, Prospectus Supplement, and any amendment relating to the Securities purchased by a purchaser containing
a misrepresentation will remain unaffected by the non-delivery of the Prospectus referred to above.
In
an offering of securities that are convertible, exchangeable or exercisable into other securities, purchasers are cautioned that
the statutory right of action for damages for a misrepresentation contained in a prospectus is limited, in certain provincial
and territorial securities legislation, to the price at which such securities are offered to the public under the prospectus offering.
This means that, under the securities legislation of certain provinces or territories, if the purchaser pays additional amounts
upon conversion, exchange or exercise of such securities, those amounts may not be recoverable under the statutory right of action
for damages that applies in those provinces. The purchaser should refer to any applicable provisions of the securities legislation
of the purchaser’s province for the particulars of these rights, or consult with a legal advisor.
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