Electric Metals (TSX-V:EML) (USA) Limited (EML) announced that it intends to raise about C$6.25 million in a non-brokered financing, by issuing up to 26,595,746 company units at a price of $0.235 per unit.
The mineral development company said proceeds from the offering will be used to expedite exploration drilling, metallurgical and battery test work and to initiate process design and preliminary mine studies at the high-grade Emily Manganese Project in Minnesota.
Electric Metals also noted that Quail Bend LLC has agreed to participate in the financing by acquiring up to 21,276,596 company units, which would give it up to a 16.7% ownership interest in EML.
“With drilling at the high-grade Emily Manganese Project continuing, we are looking to fast-track a number of other project-related activities including a resource upgrade, metallurgical and battery test work, process design and preliminary mine studies,” Electric Metals CEO Gary Lewis said in a statement.
“The additional funding provided by Quail Bend and the EML insiders will provide certainty in this regard and potentially cut months off our previously determined timeline,” he added.
Each unit of the offering will consist of one EML common share plus one share purchase warrant, with each warrant exercisable to acquire one additional company common share for a period of 24 months from the date of issuance of the unit.
The company added that it has granted Quail Bend certain investor rights so long as it controls 10.0% or more of EML’s issued and outstanding shares, which includes: allowing Quail Bend to fill a newly-created sixth board seat with its nominee as well as receiving the right to nominate a director for election as a company nominee at each EML shareholder meeting; and providing Quail Bend with the right to participate in any public or private equity financing by the company to maintain its pro rata ownership interest.
Any securities issued under the offering will be subject to a hold period of four months and a day in Canada from the closing date of the financing in accordance with the rules and policies of the TSX Venture exchange as well as applicable Canadian securities laws.
Electric Metals (USA) is a US-based mineral development company with manganese and silver projects geared to supporting the transition to clean energy.
The company's principal asset is the Emily Manganese Project in Minnesota, which has had US$26 million invested to date.
Contact Sean at sean@proactiveinvestors.com