LithiumBank Resources
Corp. (
TSX-V: LBNK)
(the “
Company” or “
LithiumBank”)
is pleased to announce that it has closed its previously announced
bought deal private placement financing pursuant to an underwriting
agreement among Echelon Capital Markets, Beacon Securities Limited
and Red Cloud Securities Inc. (collectively, the
“
Underwriters") and the Company dated May 15, 2023
(the “
Underwriting Agreement”) in connection with
the “bought deal” private placement of 3,631,700 units of the
Company issued on a charity flow-through basis (the "
FT
Units") at a price of $1.90 per FT Unit (the "
FT
Issue Price") for gross proceeds of $6,900,230
("
Offering"). Each FT Unit consists of one common
share of the Company to be issued as a "flow-through share" within
the meaning of the Income Tax Act (Canada) (each, a “
FT
Share") and three quarters of one common share purchase
warrant of the Company (each whole common share purchase warrant, a
"
FT Warrant"), each issued as a "flow-through
share" within the meaning of the Income Tax Act (Canada). Each FT
Warrant entitles the holder thereof to purchase one non
flow-through Common Share (a "
Warrant Share") at
an exercise price of $2.00 per Warrant Share for a period of 36
months from the date of issuance thereof, subject to adjustment in
certain events.
Pursuant to the Underwriting Agreement, the
Underwriters received a cash commission representing an aggregate
of 6.0% of the gross proceeds raised under the Offering and were
issued an aggregate of 192,372 non-transferable compensation
warrants of the Company (“Compensation Warrants”).
Each Compensation Warrant entitles the holder to purchase one unit
(a “Compensation Unit”) of the Company at a price
of $1.28 per Compensation Unit for a period of 36 months from the
date of issuance. Each Compensation Unit is comprised of one common
share in the capital of the Company ("Compensation
Share") and three quarters of one common share purchase
warrant (each whole warrant, a "Compensation Unit
Warrant"). Each Compensation Unit Warrant entitles the
holder thereof to purchase one Compensation Share at price of $2.00
for a period of 36 months from the date of issuance. The
Underwriters received a reduced cash commission of 3.0% and that
number of Compensation Warrants equal to 3.0% of the number of FT
Units sold to purchasers under a president's list.
The FT Shares partially comprising the FT Units
will be used to incur, on the Company's Canadian mineral
exploration properties, Canadian exploration expenses that will
qualify as "flow-through mining expenditures", as defined in
subsection 127(9) of the Income Tax Act (Canada) (collectively, the
"Qualifying Expenditures"). The Qualifying
Expenditures will be incurred on or before December 31, 2024 and
will be renounced by the Company to the subscribers with an
effective date no later than December 31, 2023 to the initial
purchasers of the FT Units in an aggregate amount not less than the
gross proceeds raised from the issue of the FT Shares partially
comprising the FT Units. In the event that the Company is unable to
renounce the issue price of the FT Shares partially comprising the
FT Units on or prior to December 31, 2023 for each FT Unit
purchased and/or if the Qualifying Expenditures are reduced by the
Canada Revenue Agency, the Company will as sole recourse for such
failure to renounce, indemnify each FT Unit subscriber for the
additional taxes payable by such subscriber to the extent permitted
by the Income Tax Act (Canada) as a result of the Company's failure
to renounce the Qualifying Expenditures as agreed. Currently, the
Company intends to use the proceeds raised from the Offering for
exploration and development of its projects in Alberta.
In compliance with applicable regulatory
requirements and in accordance with National Instrument 45-106 –
Prospectus Exemptions (“NI 45-106”), 2,630,700 FT
Units were offered for sale to purchasers resident in Canada and
other qualifying jurisdictions pursuant to the listed issuer
financing exemption under Part 5A of NI 45-106 (the “Listed
Issuer Financing Exemption”). Because this portion of
Offering was completed pursuant to the Listed Issuer Financing
Exemption, 2,630,700 FT Units issued to purchasers in the Offering
are not subject to a hold period pursuant to applicable Canadian
securities laws. There is an offering document related to the
Offering that can be accessed under the Company’s profile at
www.sedar.com and on the Company’s website at
https://www.lithiumbank.ca/.
The Compensation Warrants, Compensation Shares,
Compensation Unit Warrants and 1,001,000 FT Units issued and
issuable under the Offering are subject to a statutory hold period
and may not be traded until September 16, 2023, except as permitted
by applicable securities legislation.
The Offering is subject to the final approval of
the TSX Venture Exchange.
Line of Credit Agreement
The Company is also pleased to announce that it
has entered into a line of credit agreement (the “Line of
Credit Agreement”) with a related party of the Company
(the “Lender”), pursuant to which the Lender will
provide the Company with a revolving credit facility in the
principal sum of up to $2,000,000 (the “Credit
Facility”). The Credit Facility accrues interest at a rate
of 15% per annum, paid quarterly, and any outstanding indebtedness
will mature on March 31, 2025 (the “Maturity
Date”). The accrued interest will be due on the 1st
business day following the end of each calendar quarter.
The Company is not issuing any securities,
paying any bonus, commission, or finder's fees in connection with
the Credit Facility and any indebtedness thereunder is not
convertible, directly or indirectly, into equity or voting
securities of the Company. Any indebtedness under the Credit
Facility is repayable at any time without penalty prior to the
Maturity Date. Should all or any part of indebtedness under the
Credit Facility, including interest, not be paid when due, the rate
of interest shall increase to 18% per annum, calculated and
compounded daily, until all amounts are paid in full.
In connection with the Credit Facility, the
Company intends to deliver a fixed and floating charge demand
debenture (the “Security”) to the Lender in the
principal amount of $2,000,000, mortgaging and charging certain
mineral claims in connection with the Company’s Park Place property
located in Alberta, Canada, as a fixed mortgage and charge against
the Claims.
Multilateral Instrument
61-101
The Lender is an affiliate of a director of the
Company, and as a result, the entering into of the Line of Credit
Agreement constitutes a "related party transaction" within the
meaning of Multilateral Instrument 61-101 - Protection of Minority
Security Holders in Special Transactions ("MI
61-101"). The Credit Facility has been determined to be
exempt from the requirements to obtain a formal valuation or
minority shareholder approval based on sections 5.5(b) and 5.7(a)
of MI 61-101, as the Company does not have securities listed or
quoted on any of the specified markets listed in section 5.5(b) of
MI 61-101 and at the time of the entering into of the Line of
Credit Agreement, the fair market value of the Credit Facility does
not exceed 25% of the Company's market capitalization.
About LithiumBank Resources Corp.
LithiumBank Resources Corp. is a development
company focused on lithium-enriched brine projects in Western
Canada where low-carbon-impact, rapid DLE technology can be
deployed. LithiumBank currently holds over 3.6 million acres of
mineral titles, 3.33M acres in Alberta and 336k acres in
Saskatchewan. LithiumBank’s mineral titles are strategically
positioned over known reservoirs that provide a unique combination
of scale, grade and exceptional flow rates that are necessary for a
large-scale direct brine lithium production. LithiumBank is
advancing and de-risking several projects in parallel of the
Boardwalk Lithium Brine Project.
Contact: Rob ShewchukCEO & Directorrob@lithiumbank.ca(778)
987-9767
Neither 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 release.
Cautionary and Forward-Looking
Statements
This news release does not constitute an offer
to sell or a solicitation of an offer to buy nor shall there be any
sale of any of the securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful, including any of the
securities in the United States of America. The securities have not
been and will not be registered under the United States Securities
Act of 1933, as amended (the “1933 Act”) or any state securities
laws and may not be offered or sold within the United States or to,
or for account or benefit of, U.S. Persons (as defined in
Regulation S under the 1933 Act) unless registered under the 1933
Act and applicable state securities laws, or an exemption from such
registration requirements is available.
This news release contains certain statements
and information that may be considered “forward-looking statements”
and “forward looking information” within the meaning of applicable
securities laws. In some cases, but not necessarily in all cases,
forward-looking statements and forward-looking information can be
identified by the use of forward-looking terminology such as
“plans”, “targets”, “expects” or “does not expect”, “is expected”,
“an opportunity exists”, “is positioned”, “estimates”, “intends”,
“assumes”, “anticipates” or “does not anticipate” or “believes”, or
variations of such words and phrases or statements that certain
actions, events or results “may”, “could”, “would”, “might”, “will”
or “will be taken”, “occur” or “be achieved” and other similar
expressions. In addition, statements in this news release that are
not historical facts are forward looking statements, including
statements or information concerning the use of proceeds of the
Offering, the tax treatment of the FT Shares and FT Warrants, final
approvals by the TSX Venture Exchange, the future performance of
the Company's business, its operations and its financial
performance and condition, as well as management’s objectives,
strategies, beliefs and intentions and the belief that the Company
is sufficiently capitalized to advance its projects in Alberta.
These statements and other forward-looking
information are based on assumptions and estimates that the Company
believes are appropriate and reasonable in the circumstances,
including, without limitation, assumptions about the future prices
of minerals; the price of other commodities such as coal, fuel and
electricity; currency exchange rates and interest rates; favourable
operating conditions; political stability; timely receipt of
governmental approvals, licences and permits (and renewals
thereof); access to necessary financing; stability of labour
markets and market conditions in general; availability of
equipment; the accuracy of mineral resource estimates; estimates of
costs and expenditures to complete the Company’s programs and
goals; and there being no significant disruptions affecting the
development and operation of the project, including due to the
COVID-19 pandemic.
There can be no assurance that such statements
will prove to be accurate, and actual results and future events
could differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from the Company’s expectations include risks associated
with the business of the Company; business and economic conditions
in the mining industry generally; the supply and demand for labour
and other project inputs; changes in commodity prices; changes in
interest and currency exchange rates; risks relating to inaccurate
geological and engineering assumptions; risks relating to
unanticipated operational difficulties; failure of equipment or
processes to operate in accordance with specifications or
expectations; cost escalations; unavailability of materials and
equipment; government action or delays in the receipt of government
approvals; industrial disturbances or other job action;
unanticipated events related to health, safety and environmental
matters; risks relating to adverse weather conditions; political
risk and social unrest; changes in general economic conditions or
conditions in the financial markets; and other risk factors as
detailed from time to time in the Company’s continuous disclosure
documents filed with Canadian securities regulators. The Company
does not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
LithiumBank Resources (TSXV:LBNK)
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