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Defense Metals Corp. (“Defense Metals” or the “Company”) (TSXV: DEFN,OTC:DFMTF) is pleased to announce that the Company has closed its previously announced “best effort” private placement (the “Brokered Offering”) and non-brokered private placement (the “Non-Brokered Offering”, and together with the Brokered Offering, the “Offering”) for aggregate gross proceeds of C$16,153,334.
Under the Brokered Offer, the Company raised gross proceeds of $11,500,200issuing 38,334,000 units of the company (each a “Unit“) at a price of €0.30 per Unit, including the full exercise of the option granted to the Agents (as defined herein) to increase the size of the Intermediate Offering by up to approximately 15%.
In the context of the unbrokered offering, the Company raised gross proceeds of €4,653,134 by issuing 15,510,446 Units. The company expects to close a second tranche of the non-easy offering in the coming days for additional gross proceeds of up to $570,000.
The Units sold in the Offering are issued on a prospectus exemption basis in accordance with the “listed issuer financing exemption” under Part 5A of National Instrument 45-106 – Prospectus exemptions and coordinated general order 45-935 – Exemptions from certain conditions of the financing exemption of listed issuers (together the “LIFE Exemption“).
Each Unit consists of one class A ordinary share in the capital of the Company (a “Common share“) and one-half of one common stock purchase warrant (each whole warrant, a “Deposit“). Each Warrant entitles the holder thereof to acquire one additional Ordinary Share at a price of €0.45 per common share, at any time on or before October 312028. The Warrants will be subject to an accelerated expiration upon thirty (30) days’ notice by the Company in the event that the Company’s common shares trade at a closing price equal to or higher than $0.90 for ten (10) consecutive trading days.
“I am extremely pleased with the level of support in relation to the Offering and would like to thank our financial partners and all investors, both existing and new, for their enthusiasm and support,” said Mark ToryCEO of Defense Metals. “We are now in a solid financial position to move forward with launching the Bankable Feasibility Study in the first quarter of next year.”
Paradigm Capital Inc., as lead agent and sole bookrunner, and EAS Advisors LLC, trading through Odeon Capital Group LLC (collectively the “Agents“) acted as agents in the context of the brokered offer. In return for their services in the context of the brokered offer, the agents received a total cash commission of $805,014 as well as 2,683,380 non-transferable compensation options (the “Compensation options“). Each Compensation Option is exercisable for one common share $0.30 per share at any time on or before October 31, 2028. In addition, the Company paid finder’s fees of €2.50 $41,582 and issued 63,708 compensation options to at-market investors in connection with the less-than-convenient offering. The Compensation Options are subject to a statutory retention period of four months, ending on March 1, 2026.
The Units issued under the LIFE Exemption to Canadian resident subscribers are not subject to a hold period under applicable Canadian securities laws, other than a four-month TSX Venture Exchange (“TSXV“) holding period applicable to certain purchasers under the policies of the TSXV is expiring March 1, 2026. The Offering is subject to final approval by the TSXV.
The Company intends to use the net proceeds from the Offering, together with existing working capital, to continue optimization testing work on the flowsheet developed for and published under the 2025 pre-feasibility study, to complete pilot plant test work in support of the optimized flowsheet, to conduct energy and transmission studies, to initiate a feasibility study for the Wicheeda project in early 2026 and to continue baseline studies to support for future permits. The net proceeds will also be used for operating expenses and general corporate purposes.
Company insiders participated in the Non-Brokered Offering for approx $670,300. The issuance of Participations to insiders is considered a ‘related party transaction’ within the meaning of Multilateral Instrument 61-101 – Protection of minority security holders in special transactions (“MI 61-101“). The Company relies on exemptions from the formal valuation requirements of MI 61-101 pursuant to section 5.5(a) and the minority shareholder approval requirements of MI 61-101 pursuant to section 5.7(1)(a) with respect to such insider participation as the fair market value of the transaction, to the extent any interested parties are involved, does not exceed 25% of the market capitalization of the Company.
The securities referred to in this press release have not been and will not be registered under the United States Securities Act of 1933, as amended (the “US securities law“) or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons who are not registered under the U.S. Securities Act and applicable state securities laws, unless an exemption from such registration is available. This press release does not constitute an offer to sell securities or a solicitation of offers to buy securities. Any public offering of securities in the United States must be done by means of a prospectus containing detailed information about the Company and its management, as well as financial statements. “United States” and “U.S. Person” have the respective meanings set forth in Regulation S under the United States Securities Act.
For more information, visit www.defensemetals.com or contact:
Mark Tory
Chairman and CEO
Tel: +1 604-445-8179
Email: mark@defensemetals.com
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.
Cautionary Note Regarding “Forward-Looking” Information
This press release contains “forward-looking information or statements” within the meaning of applicable securities laws, including, without limitation, any statements (express or implied) relating to: the advancement of the Wicheeda Project, the use of the net proceeds from the Offering, the final TSXV approval of the Offering, the completion of a second tranche of the Non-Convenient Offering, the technical, financial and business prospects of the Company and other matters. Forward-looking statements are generally identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “predict,” “project,” “continue,” “could,” “could,” “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 press release, other than statements of historical fact, that relate to events, contributions or developments that the Company expects to occur are forward-looking statements. Although the Company believes that 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 current and future business strategies and the environment in which the Company will operate in the future, including the price of rare earth metals, its expected costs and expenses, its ability to achieve its objectives, that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when necessary and on reasonable terms. Such forward-looking information reflects the Company’s views regarding 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). Although such estimates and assumptions are considered reasonable by the Company’s management, 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 (including First Nations) acceptance, risks related to unexpected operational problems (including failure of equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of personnel, materials and equipment, government actions or delays in receipt of government approvals, industrial disruptions or other job actions, and unexpected events related to health, safety and environmental matters), risks related to inaccurate geological, metallurgical, technical and price assumptions, decline in the price of rare earth metals, the impact of viruses and diseases on the company’s ability to operate, restriction of labor and international travel and supply chains, loss of key employees, consultants, officers or directors, increases in costs, delayed results, lawsuits and failure of counterparties to fulfill their contractual obligations. The Company undertakes no obligation to update any forward-looking statements or forward-looking information, except as required by law.
SOURCE Defense Metals Corp.
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