Scottie Resources Corp said it has entered into an agreement under which Cormark Securities Inc, as lead agent on behalf of a syndicate of agents, will undertake a 'best efforts' private placement for aggregate gross proceeds to the company of approximately $6 million.
The offering will comprise 6,670,000 common shares of the company that qualify as 'flow-through shares' (FT shares) at a price of $0.30 each for gross proceeds of $5,001,000, and 4,762,000 common shares of the company (HD shares) at a price of $0.21 each for gross proceeds of $1,000,020,
The agents will have the option exercisable, in whole or in part at any time up to 48 hours prior to the closing of the offering, to offer for sale up to an additional 3,200,000 common shares of the company which option will be exercisable for FT shares at the FT share issue price, HD shares at the HD share issue price, or some combination thereof.
The net proceeds from the issue of the HD Shares will be used for working capital and general corporate purposes.
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Scottie Resources said it will use an amount equal to the gross proceeds received by the company from the sale of the FT shares under the provisions in the Income Tax Act (Canada), to incur eligible 'Canadian exploration expenses' that qualify as 'flow-through mining expenditures' as both terms are defined in the Income Tax Act (Canada) related to the company's projects in British Columbia, on or before December 31, 2023, and to renounce all the qualifying expenditures in favour of the subscribers of the FT Shares effective December 31, 2022.
If the qualifying expenditures are reduced by the Canada Revenue Agency, the company will indemnify each FT share subscriber for any additional taxes payable by such subscriber as a result of the company's failure to renounce the qualifying expenditures as agreed.
The offering is expected to close on or about April 20, 2022, or such other date as the company and the agents may agree and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the acceptance of the TSX Venture Exchange.
Contact the author at jon.hopkins@proactiveinvestors.com