Formation Metals completes $4.42-million financing
2016-06-01 18:51 ET - News Release
Mr. Paul Farquharson reports
FORMATION METALS COMPLETES OVERSUBSCRIBED $4.4M PRIVATE PLACEMENT
Formation Metals Inc. has completed its previously announced offering with the majority of the overallotment option exercised, pursuant to which it has issued and sold 14,755,200 units of the company at a price of 30 cents per unit for total gross proceeds of $4,426,560. On a fully diluted basis, the units sold represents 24.99 per cent of preclosing issued and outstanding common shares. Management and insiders subscribed to 8 per cent of the offering.
Each unit purchased in the offering consisted of one common share of the company and one-half of one common share purchase warrant. Each warrant entitles the holder thereof to acquire one share at a price of 40 cents for a period of 24 months following the closing date. The offering was completed on a private placement basis by Dundee Securities Ltd. The units issued in connection with the offering are subject to a statutory hold period in accordance with applicable securities legislation.
The company paid a total commission fee of $177,886 and issued 592,954 warrants to Dundee and other agents. The compensation warrants have an exercise price of 37 cents and each compensation warrant entitles the holder thereof to acquire one share for a period of 24 months following the closing date.
The company intends to use the net proceeds of the offering to finance bankable-feasibility-level technical studies on the company's Idaho cobalt project and for general working capital purposes.
"The closing of this financing is a major advancement in moving our Idaho cobalt project towards production," stated Paul Farquharson, president and chief executive officer of Formation Metals. He continued, "These funds are expected to allow us to produce a bankable feasibility study that will assist the company in moving forward on project capex financing."
We seek Safe Harbor.
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