FORUM ENERGY METALS ANNOUNCES CLOSING OF BROKERED PRIVATE PLACEMENT FOR PROCEEDS OF C$10.4 MILLION
Forum Energy Metals Corp. has closed its previously announced best efforts private placement for gross proceeds of $10,364,014, which includes the full exercise of the agents’ option for gross proceeds of $1.5-million. Under the offering, the company sold the following:
- 48,648,648 flow-through units of the company to purchasers at a price of 18.5 cents per FT unit for gross proceeds of $9-million from the sale of FT units;
- 11,366,787 units of the company at a price of 12 cents per unit for gross proceeds of $1,364,014 from the sale of units.
Under the offering, Red Cloud Securities Inc. acted as lead agent and sole bookrunner on behalf of a syndicate of agents that included Stifel Nicolaus Canada Inc.
Each FT unit consists of one common share of the company and one-half of one common share purchase warrant. The FT shares and warrants comprising the FT units will qualify as flow-through shares within the meaning of the Income Tax Act (Canada). Each unit consists of one common share of the company and one-half of one warrant. Each whole warrant shall entitle the holder to purchase one common share of the company at a price of 18.5 cents at any time on or before Dec. 12, 2025.
The company intends to use the proceeds raised from the offering for exploration of its Thelon basin uranium project in Nunavut and for general working capital purposes. Proceeds from the sale of FT units will be used to incur Canadian exploration expenses as defined in Subsection 66.1(6) of the Income Tax Act and flow-through critical mineral mining expenditures as defined in Subsection 127(9) of the Income Tax Act. Such proceeds will be renounced to the subscribers with an effective date not later than Dec. 31, 2023, in the aggregate amount of not less than the total amount of gross proceeds raised from the issue of FT units.
A total of 27,027,027 FT units were sold pursuant to the listed issuer financing exemption (LIFE) under Part 5A of National Instrument 45-106 — Prospectus Exemptions. The LIFE units are immediately freely tradeable under applicable Canadian securities legislation for Canadian purchasers. The remaining 21,621,621 FT units, as well as the 11,366,787 units were distributed by way of the accredited investor, minimum amount investment and other exemptions under NI 45-106 in certain provinces of Canada, and are subject to a four-month restricted period in Canada ending on April 13, 2024. The offering is subject to certain conditions including, but not limited to, the receipt of all required regulatory approvals including final approval of the TSX Venture Exchange.
In connection with the offering, the company paid to the agents cash commissions totalling $588,289 equal to 6.0 per cent of the gross proceeds raised under the offering. The company also issued to the agents 3,321,326 warrants of the company. Each compensation warrant shall entitle the holder thereof to purchase one common share of the company at a price of 12 cents at any time on or before Dec. 12, 2025. No compensation was paid in respect of certain president’s list purchasers and a strategic investor that has maintained its 9.9-per-cent interest in the company through this offering.
Insiders of the company participated in the offering for $69,600, and such units issued to insiders are subject to a four-month hold period pursuant to applicable policies of the TSX Venture Exchange. The issuance of units to insiders is considered a related party transaction within the meaning of Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions. The company is relying on exemptions from the formal valuation requirements of MI 61-101 pursuant to Section 5.5(a) and the minority shareholder approval requirements of MI 61-101 pursuant to Section 5.7(1)(a) in respect of such insider participation as the fair market value of the transaction, insofar as it involves interested parties, does not exceed 25 per cent of the company’s market capitalization.
About Forum Energy Metals Corp.
Forum Energy Metals is focused on the discovery of high-grade unconformity-related uranium deposits in the Athabasca basin, Saskatchewan, and the Thelon basin, Nunavut. In addition, Forum holds a diversified energy metal portfolio of copper, nickel and cobalt projects in Saskatchewan and Idaho.