MGX Minerals Inc. (XMG: CNX) has closed the company’s previously announced private placement financing through the distribution of 3,555,556 special warrants of the company at a price of 90 cents per special warrant for gross proceeds of $3.2-million. Each special warrant is exercisable, for no additional consideration, into one unit of the company. Each unit shall comprise one common share and one common share purchase warrant, with each warrant entitling the holder to purchase one additional common share at a price of $1.15 until May 12, 2019, subject to acceleration at any time prior to the expiry of the warrants. If the 10-day volume-weighted average trading price of the common shares exceeds $2, then the company may provide notice to the holders of the warrants that the warrants will expire 30 days after the date of the notice.
The Company intends to use the net proceeds from the Offering to reduce indebtedness (including trade payables and up to CAD$500,000 in repayment of a loan made to MGX by an officer of MGX) and for development and exploration of its Alberta Lithium Claims, Sturgeon Lake Property and Driftwood Property (each as described in the Company’s Annual Information Form, dated March 31, 2017) and for general working capital purposes.
In accordance with the terms of an agency agreement (the “Agency Agreement”) entered into by the Company and Mackie Research Capital Corp. (the “Agent”), the Agent received a cash commission equal to 8.5% of the aggregate gross proceeds from the Offering as well as rights to receive compensation options (“Compensation Options”) in an amount equal to 8.5% of the number of Special Warrants sold under the Offering. The Compensation Options are exercisable at any time until May 12, 2019 at an exercise price equal to the Issue Price. Each Compensation Option entitles the holder to purchase one Unit. In the event that the Company does not satisfy the Qualification Condition (as defined below) on or before the Qualification Deadline (as defined below) the Compensation Options will be exercisable for 1.1 Units.
Pursuant to the terms of the Agency Agreement, the Company has agreed to use its best efforts to obtain a receipt for a final short form prospectus qualifying the distribution of the Units upon exercise of the Special Warrants (the “Qualification Condition”) on or before June 26, 2017 (the “Qualification Deadline”). If the Qualification Condition is not satisfied before the Qualification Deadline, each Special Warrant shall become exercisable, without any action on the part of the holders of the Special Warrants, and for no additional consideration, to receive 1.1 Units. Prior to the satisfaction of the Qualification Condition, the Special Warrants and the Common Shares and Warrants comprising the Units will be subject to a statutory hold period until September 13, 2017.
The Company may close additional tranches of under the Offering prior to the earlier of the satisfaction of the Qualification Condition and the Qualification Deadline. For more information on the Offering, please refer to the Company’s news release, dated March 1, 2017 available on the Company’s profile on SEDAR at www.sedar.com and at www.mgxminerals.com.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
About MGX Minerals
MGX Minerals is a diversified Canadian mining company engaged in the development of large-scale industrial mineral portfolios in western Canada and the United States. The Company operates lithium, magnesium and silicon projects throughout British Columbia and Alberta as well as petrolithium exploration in Utah.
In the interest of full disclosure, we call the reader’s attention to the fact that Equities.com, Inc. is compensated by the companies profiled in the Spotlight Companies section. The purpose of these profiles is to provide awareness of these companies to investors in the micro, small-cap and growth equity community and should not in any way be considered as a recommendation to buy, sell or hold these securities. Equities.com is not a registered broker dealer, investment advisor, financial analyst, investment banker or other investment professional. We are a publisher of original and third party news and information. All profiles are based on information that is available to the public. The information contained herein should not be considered to be complete and is not guaranteed by Equities.com to be free from misstatement or errors. The views expressed are our own and not intended to be the basis for any investment decision. Readers are reminded to do their own due diligence when researching any companies mentioned on this website. Always bear in mind that investing in early-stage companies is risky and you are encouraged to only invest an amount that you can afford to lose completely without any change in your lifestyle. Equities has been compensated with cash, common shares and/or warrants for market awareness services provided.
Read Next
