Magna Mining Inc (TSX-V:NICU) said it has entered into an agreement with Canaccord Genuity Corp, together with any syndicate of agents that may be formed, in connection with a 'best efforts' private placement.
The offering would be for up to 7,162,534 Charitable Flow-Through (CFT) shares of the corporation at a price of $1.815 each for aggregate gross proceeds of up to approximately $13 million; and for up to 2,727,272 common shares of the corporation at a price of $1.10 each for aggregate gross proceeds of up to approximately $3 million.
In addition, the corporation said it will grant the agents an option, exercisable within 48 hours prior to the closing of the offering, to sell up to an additional 1,074,380 CFT shares at the CFT price for additional gross proceeds of up to approximately $1.95 million.
READ: Magna Mining hits high-grade PGM mineralization at 109 Footwall Zone at Crean Hill mine
The CFT shares will qualify as 'flow-through shares' within the meaning of subsection 66(15) of the Income Tax Act (Canada). An amount equal to the gross proceeds from the issuance of the CFT shares will be used to incur eligible resource exploration expenses which will qualify as (i) 'Canadian exploration expenses', as defined in the Tax Act, and (ii) as 'flow-through critical mineral mining expenditures', as defined in subsection 127(9) of the Tax Act.
Qualifying expenditures in an aggregate amount not less than the gross proceeds raised from the issue of the CFT shares will be incurred (or deemed to be incurred) by the corporation on or before December 31, 2024, and will be renounced by the corporation to the initial purchasers of the CFT shares with an effective date no later than December 31, 2023.
The common shares being offered under the offering will not qualify as 'flow-through shares' for the purposes of the Tax Act. The corporation intends to use the net proceeds of the common shares offering for the projects of the corporation and general corporate purposes.
The corporation said it has agreed to pay the agents a cash commission equal to a maximum of 6.0% of the gross proceeds of the offering and a number of broker warrants equal to a maximum of 6.0% of the CFT shares and the common shares sold under the offering. Each broker warrant will entitle the holder to purchase one common share of the corporation at a price of $1.10 per common share until the close of business on the date which is 24 months from the closing date of the offering.
The offering is expected to close on or about January 25, 2023, and is subject to certain closing conditions including, but not limited to, the receipt of all necessary approvals including the conditional listing approval of the TSX Venture Exchange. The securities issued under the offering will be subject to a hold period under applicable securities laws in Canada expiring four months and one day from the closing date of the offering.
The securities offered have not been registered under the US Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
Magna Mining is an exploration and development company focused on nickel, copper and PGM (platinum group metals) projects in the Sudbury Region of Ontario, Canada. The corporation's flagship assets are the past-producing Shakespeare and Crean Hill Mines.
The Shakespeare Mine is a feasibility stage project which has major permits for the construction of a 4,500 tonne per day open pit mine, processing plant and tailings storage facility and is surrounded by a contiguous 180 square kilometre prospective land package. Crean Hill is a past-producing nickel, copper and PGM mine with an updated technical report dated August 2022.
Contact the author at jon.hopkins@proactiveinvestors.com