Agoracom Blog

New Age Metals $ $NMTLF Closes First Tranche of $2,975,000 with Lead Order from Eric Sprott $ $ $ $ $

Posted by AGORACOM at 11:30 AM on Wednesday, March 31st, 2021
  • Gross proceeds of $2,975,000
  • 1st of 2 Tranches

New Age Metals Inc. (TSXV:NAM) (OTC:NMTLF) (FSE:P7J) (“NAM” or the “Company“), is pleased to announce that further to the news release of March 26, 2021, the Company has completed the first tranche of its private placement (“Private Placement”) raising gross proceeds of $2,975,000.

The Company has issued an aggregate of 18,593,750 units (“Units”) at a purchase price of $0.16 per Unit for aggregate gross proceeds of $2,975,000.  Eric Sprott has closed 18,281,250 of the Units for $2,925,000.

Each Unit consisted of one common share and one half of one share purchase warrant, whereby each whole warrant entitles the holder to purchase one additional common share at a purchase price of $0.20 per share at any time up to March 31, 2023.

Eric Sprott, through 2176423 Ontario Ltd., a corporation which is beneficially owned by him, acquired 18,281,250 Units pursuant to the Private Placement for total consideration of $2,925,000. Prior to the Private Placement, Mr. Sprott beneficially owned or controlled 20,250,000 Common Shares and 17,125,000 Warrants of the Company.  As a result of the Private Placement, Mr. Sprott beneficially owns and controls 38,531,250 Common Shares and 26,265,625 Warrants representing approximately 19.9% of the issued and outstanding shares of the Company on a non-diluted basis and approximately 29.5% of the issued and outstanding shares of the Company on a partially diluted basis assuming the exercise of Warrants.

The Units were acquired by Mr. Sprott for investment purposes.  Mr. Sprott has a long-term view of the investment and may acquire additional securities of the Company including on the open market or through private acquisitions or sell securities of Company including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other factors that Mr. Sprott considers relevant from time to time. 

A copy of the applicable early warning report will appear on the Company’s profile on SEDAR and may also be obtained by calling Mr. Sprott’s office at (416) 945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J1).

The second tranche of 12,968,750 Units is to be completed five business days after the Company has obtained shareholder approval (from disinterested shareholders) for the new control person that would be created once Mr. Sprott’s beneficial ownership exceeds 20%.  The completion of the second tranche is conditional upon such shareholder approval being obtained by August 30, 2021.  Mr. Sprott will provide an undertaking not to exercise his warrants (if doing so would result in his non-diluted ownership interest exceeding 20%) until the Company has obtained such shareholder approval.

Mr. Sprott is an insider of the Company and, as such, his participation in the Private Placement is a related-party transaction under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”) and TSX Venture Exchange Policy 5.9 (which incorporates by reference MI 61-101). The Company is relying on exemptions from the minority shareholder approval and formal valuation requirements applicable to related party transactions under sections 5.5(a) and 5.7(1)(a), respectively, of MI 61-101, as neither the fair market value of the Units to be purchased on behalf of Mr. Sprott nor the consideration to be paid by him exceeds 25% of the Company’s market capitalization.

In connection with the first tranche of the Private Placement, the Company has paid finder fees to Mackie Research Capital Corporation of $193,375 in cash and issued 1,208,594 warrants.  Each such warrant will be exercisable for two years at an exercise price of $0.16 per Unit (being the same as the per Unit price under the Private Placement).

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