First Phosphate Corp. (CSE:PHOS) told investors it closed a second tranche of its non-brokered private placement financing originally announced for gross proceeds of a minimum of $2 million.
In a statement, the company said the initial and second tranches were oversubscribed by a factor of 275%. It issued 3,090,438 hard-dollar units and 12,560,000 flow-through (FT) shares for aggregate gross proceeds of $7,516,175 between the two tranches of financing.
Describing it as a vote of confidence in First Phosphate by existing and new shareholders including a number of institutional investors, CEO John Passalacqua said: "We are now in position to be able to drill this winter and begin uncovering the full extent of the Begin-Lamarche high-purity igneous rock phosphate horizon at only 70 km from the deep-sea Port of Saguenay.
"In our experience, proximity to port and access to infrastructure and workforce are the single largest determinants for the economic viability of any phosphate project. Begin-Lamarche has all these strong requisites. We feel that it will become the first phosphate mine to see production in Quebec. We are now in a position to accelerate its development."
In connection with the second tranche, finder's fees totaling $330,880 were paid and 369,840 compensation shares issued. The company also issued 1,179,400 compensation warrants exercisable at $0.50 per share until December 31, 2025, with a provision for an Accelerated Expiry Date.
A potential final tranche of the financing reflecting hard cash subscriptions and 2024 FT subscriptions is scheduled to close on or about January 10, 2024.
In addition, the company said it completed a credit agreement to provide the working capital that may be required to facilitate the development that the oversubscribed offering allows. The agreement with members of its management team and board of directors enables it to establish a secured revolving credit facility of $2.1m million to be advanced in installments.
~Updated with CEO quote~