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VANCOUVER, BC, Aug. 28,
2024 /CNW/ - Defense Metals Corp. ("Defense
Metals" or the "Company";(TSXV: DEFN) (OTCQB: DFMTF)
(FSE: 35D) is pleased to announce a proposed non-brokered bridge
financing of secured convertible notes (the "Notes") for
minimum gross proceeds of CAD$2,500,000 and maximum gross proceeds of up to
CAD$4,000,000 (the
"Offering"). The Company will not proceed with its
previously announced private placement of units most recently
disclosed in the Company's news release dated August 6, 2024.
The Notes will bear interest from the date of issuance at the
rate of ten percent (10%) per annum, payable quarterly in common
shares of the Company ("Common Shares") at a price per share
equal to the applicable 20-day volume weighted average price of the
Common Shares on the TSX Venture Exchange (the "TSXV"), or
such other price determined in accordance with the policies of the
TSXV. The Notes will mature on the date that is 12 months after the
date of issuance. At any time up to seven days prior to a Mandatory
Conversion Event (as defined below), investors may elect to convert
the principal amount of the Notes into Common Shares at a deemed
price per share of $0.125 (the
"Conversion Price").
The Notes will automatically convert into Common Shares upon the
occurrence of certain events (each, a "Mandatory Conversion
Event"), including the completion by the Company of a new
issuance of equity as part of a minimum CAD$4,000,000 financing from third party sources
(excluding conversion of the Notes), completion of a sale of all or
substantially all of the Common Shares or assets of the Company, or
completion of a merger or other corporate transaction coincident
with a minimum CAD$4,000,000
fundraise from third party capital (excluding conversion of the
Notes). Upon the occurrence of a Mandatory Conversion Event, the
principal amount of the Notes will automatically convert into
Common Shares at a fifteen percent (15%) discount to the applicable
price of the offering implied by the Mandatory Conversion Event,
provided that if such conversion price would be less than the
Conversion Price there will be no mandatory conversion.
The Notes will be issued on a private placement basis to
eligible accredited investors. , including lead orders from RCF
Opportunities Fund II L.P. ("RCF") and Guy de Selliers, Defense Metals' Executive
Chairman. RCF has indicated that it intends to subscribe for Notes
in the principal amount of CAD$500,000, and Guy de
Selliers has indicated that he intends to subscribe for
Notes in the principal amount of CAD$1,000,000. In connection with their
investments, each of RCF and Mr. de Selliers are expected to enter
into a separate investor rights agreements, pursuant to which each
will receive certain board observer rights, cashflow reporting
rights and rights to participate in future financings of the
Company.
The Notes will be secured against all personal property of the
Company and a first ranking security interest against the Company's
mining claims in respect of the Wicheeda REE Project. All note
holders will rank pari passu among themselves.
The Company intends to use the proceeds of the Offering for
completion of the pre-feasibility study for the Wicheeda REE
Project and general corporate and working capital purposes. The
Notes and any underlying Common Shares will be subject to a
four-month hold period from the date of issuance of the Notes as
set out in National Instrument 45-102 – Resale of
Securities.
The Offering is expected to complete in September 2024. Closing of the Offering is
subject to a number of conditions, including receipt of all
necessary corporate and regulatory approvals, including the TSXV.
The Offering is subject to minimum subscriptions in the amount of
CAD$2,500,000.
As described above, Mr. Guy de
Selliers, the Company's Executive Chair, intends to
subscribe for CAD$1,000,000 of Notes
in the Offering. Other members of the Company's Board or management
team may participate in the Offering including subscriptions
from related parties of the Company as defined in Multilateral
Instrument 61-101 Protection of Minority Security Holders
in Special Transactions ("MI 61-101").
The participation of management in the Offering is exempt from
formal valuation and minority shareholder approval
requirements pursuant to exemptions contained in
sections 5.5(a) and 5.7(1)(a) of MI 61-101.
Investors that are interested in participating in the Offering
should contact the Company's Senior Vice President, Corporate
Development & Interim CFO, Alex
Heath at alex@defensemetals.com. Participation in the
Offering is limited to "accredited investors" (as defined under
applicable securities laws) and may be subject to a minimum
subscription amount and total investments not to exceed
CAD$4,000,000.
This news release does not constitute an offer to sell or the
solicitation of any offer to buy, nor shall there be any sale of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful. The Notes and the Common
Shares which may be issued on exercise thereof have not been and
will not be registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act"), or any U.S.
state securities laws, and may not be offered or sold in
the United States, or to or for
the account or benefit of any U.S. person or any person in
the United States, absent
registration or an applicable exemption from the registration
requirements of the U.S. Securities Act and applicable U.S. state
securities laws. "U.S. person" and "United States" have the
respective meanings ascribed to them in Regulation S under the U.S.
Securities Act.
About Defense Metals Corp. and its Wicheeda Rare Earth
Element Project
Defense Metals Corp. is focused on the development of its 100%
owned, 8,301-hectare (~20,534-acre) Wicheeda REE Project that is
located on the traditional territory of the McLeod Lake Indian Band
in British Columbia, Canada.
The Wicheeda REE Project, approximately 80 kilometres (~50
miles) northeast of the city of Prince
George, is readily accessible by a paved highway and
all-weather gravel roads and is close to infrastructure, including
hydro power transmission lines and gas pipelines. The nearby
Canadian National Railway and major highways allow easy access to
the port facilities at Prince
Rupert, the closest major North American port to
Asia.
Defense Metals is a proud member of Discovery Group. For more
information please visit:
www.discoverygroup.ca.
For further information, please visit
www.defensemetals.com or contact:
Alex Heath
Senior Vice President, Corporate Development & Interim CFO
Tel: +1 604-354-2491
Email: alex@defensemetals.com
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
Cautionary Statement Regarding "Forward-Looking"
Information
This news release contains "forward–looking information or
statements" within the meaning of applicable securities laws, which
may include, without limitation, statements relating to the
Offering, completion thereof, receipt of TSXV and other regulatory
approvals for the Offering and the use of proceeds therefrom.
All statements in this news release, other than statements of
historical facts, that address events or developments that the
Company expects to occur, are forward-looking statements. Although
the Company believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and actual
results may differ materially from those in the forward-looking
statements. Such statements and information are based on numerous
assumptions regarding present and future business strategies and
the environment in which the Company will operate in the future,
including the price of rare earth elements, the anticipated costs
and expenditures, the ability to achieve its goals, that general
business and economic conditions will not change in a material
adverse manner, that financing will be available if and when needed
and on reasonable terms. Such forward-looking information reflects
the Company's views with respect to future events and is subject to
risks, uncertainties and assumptions, including the risks and
uncertainties relating to the interpretation of exploration and
metallurgical results, risks related to the inherent uncertainty of
exploration and development and cost estimates, the potential for
unexpected costs and expenses and those other risks filed under the
Company's profile on SEDAR+ (www.sedarplus.ca). While such
estimates and assumptions are considered reasonable by the
management of the Company, they are inherently subject to
significant business, economic, competitive and regulatory
uncertainties and risks. Factors that could cause actual results to
differ materially from those in forward looking statements include,
but are not limited to, continued availability of capital and
financing and general economic, market or business conditions,
adverse weather and climate conditions, failure to maintain or
obtain all necessary government permits, approvals and
authorizations, failure to maintain or obtain community acceptance
(including First Nations), risks relating to unanticipated
operational difficulties (including failure of equipment or
processes to operate in accordance with specifications or
expectations, cost escalation, unavailability of personnel,
materials and equipment, government action or delays in the receipt
of government approvals, industrial disturbances or other job
action, and unanticipated events related to health, safety and
environmental matters), risks relating to inaccurate geological,
metallurgical, engineering and pricing assumptions, decrease in the
price of rare earth elements, the impact of viruses and diseases on
the Company's ability to operate, restriction on labour and
international travel and supply chains, loss of key employees,
consultants, officers or directors, increase in costs, delayed
results, litigation, and failure of counterparties to perform their
contractual obligations. The Company does not undertake to update
forward–looking statements or forward–looking information, except
as required by law.
SOURCE Defense Metals Corp.