VANCOUVER, BC, Oct. 11,
2024 /CNW/ - Defense Metals Corp. ("Defense Metals"
or the "Company") (TSXV: DEFN) (OTCQB: DFMTF) (FSE: 35D) today
announced the successful closing of its previously announced
non-brokered bridge financing of secured convertible notes (the
"Notes"), raising $4,000,000 in gross
proceeds (the "Offering").
Update on Prefeasibility Study
The proceeds of the Offering will enable Defense Metals to
complete the Prefeasibility Study ("PFS") for the Wicheeda Rare
Earth Element Project, carry out scenario analyses, evaluate
possible optimization of processes, and conduct further
testing. The PFS will be substantially completed by the end
of the year, with the final results published in Q1 2025. The PFS
is being led by Hatch Ltd., with metallurgical oversight provided
by rare earth processing expert John
Goode.
Following the completion of the PFS, Defense Metals plans to
immediately launch into the Definitive Feasibility Study ("DFS"),
with financing expected to take place in Q1 2025.
CEO Search Update
The Company is also actively conducting a search for a new CEO,
which is being led by executive search firm Johnson Partners. A
number of highly qualified candidates have already been identified,
and the new CEO is expected to be in place by Q1 2025.
Guy de Selliers, Executive
Chairman and Acting CEO of Defense Metals, commented:
"We are encouraged by the progress we are making
at this pivotal stage for Defense Metals. The successful completion
of a fully subscribed financing is a testament to the quality of
the Wicheeda Project, which is by all accounts one of the very best
undeveloped rare earth mining projects in North America. Our fruitful collaboration with
Hatch, who played a lead engineer role on Arafura's Nolan's
project, is helping us advance swiftly toward completing our PFS.
We are also pleased with the positive response to our CEO search
and look forward to having a new CEO in place by Q1 2025, as we
continue to accelerate forward."
Alex Heath, SVP Corporate
Development & Interim CFO of Defense Metals, added:
"This financing provides the necessary financial
resources we need to complete the pre-feasibility study and further
advance our technical and optimization work. It also positions us
to raise the financing required for the Definitive Feasibility
Study as a further step towards bringing the Wicheeda deposit into
production. We are confident that we will be able to raise
the necessary financing for the project with the help of our
financial advisor HCF International Advisors, which was
instrumental in mobilizing AUD$1 billion debt package for Arafura's
rare earth project in Australia."
Terms of The Notes
The Notes bear interest from the date of issuance at a 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 12 months after the date of issuance. Investors
have the option to convert the principal amount of the Notes into
Common Shares at a deemed price of $0.125 per share up to seven days prior to a
Mandatory Conversion Event (as defined below).
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 $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 $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 were issued on a private placement basis to eligible
accredited investors, with lead orders from Okeburn Corp Limited
("Okeburn"), a company owned by a family trust of Guy de Selliers, Defense Metals' Executive
Chairman and RCF Opportunities Fund II L.P. ("RCF"). Okeburn
participated for $1,768,000, and RCF
subscribed for Notes in the principal amount of $500,000. In connection with their investments,
both RCF and Okeburn entered into separate investor rights
agreements, granting them certain board observer rights, cashflow
reporting rights, and rights to participate in future financings of
the Company. The participation of Okeburn 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.
The Notes are 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 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 are 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.
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.
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, any statements (expressed or
implied) relating to: advancing the Wicheeda Project, the use of
net proceeds from the Private Placement, final TSXV approval of the
Private Placement, the technical, financial and business prospects
of the Company, its project and other matters. Forward-looking
statements are typically identified by words such as "plan,"
"believe," "expect," "anticipate," "intend," "outlook," "estimate,"
"forecast," "project," "continue," "could," "may," "might,"
"possible," "potential," "predict," "should," "would" and other
similar words and expressions, but the absence of these words does
not mean that a statement is not forward-looking. All statements in
this news release, other than statements of historical facts, that
address events, contribution 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.
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SOURCE Defense Metals Corp.