Defense Metals Corp. (TSX-V: DEFN) (OTCQB: DFMTF) (FSE: 35D) is pleased to announce that, further to its news release of April 27, 2023, it has closed its non-brokered private placement financing of 22,367,977 common shares of the Company at a price of $0.26 per Common Share, and the Concurrent Placement (as defined below) of 25,708,946 Common Shares at the same issue price, for aggregate gross proceeds of C$12.5 million. The Concurrent Placement includes a lead order from RCF Opportunities Fund II L.P. consisting of 25,552,380 Common Shares for gross proceeds of C$6.6 million. John Robins of Discovery Group and Strategic Advisor to the Company, also participated in the Offering.

Craig Taylor, CEO of Defense Metals, commented:

“We are very pleased to welcome RCF Opps II as a key shareholder. We will continue to advance the Wicheeda Light Rare Earth Elements project and we look forward to working with the many stakeholders. We believe the Wicheeda Light Rare Earth Elements project is the best rare earths project in Canada and one of the best developing REE projects globally.”

Subject to compliance with applicable regulatory requirements and in accordance with National Instrument 45-106 – Prospectus Exemptions the Common Shares issued pursuant to the LIFE Offering were offered for sale to purchasers resident in Canada, except Quebec, and/or other qualifying jurisdictions pursuant to the listed issuer financing exemption under Part 5A of NI 45-106, which Common Shares are not subject to a hold period pursuant to applicable Canadian securities laws. In connection with the Listed Issuer Financing Exemption, the Company filed an offering document dated April 27, 2023 on SEDAR under the Company’s profile at www.sedar.com and on the Company’s website at www.defensemetals.com.

In addition to the LIFE Offering, the Company completed a concurrent non-brokered private placement to purchasers pursuant to applicable exemptions under NI 45-106. The Common Shares issued pursuant to the Concurrent Placement are subject to a statutory hold period of four months and one day in accordance with applicable Canadian securities laws.

In connection with the Offering, the Company paid aggregate cash finder’s fees of $211,056 and issued 2,311,753 non-transferable common share warrants. The Warrants are exercisable at $0.32 per Common Share for a period of two years from the closing date of the Offering.

Notably, RCF Opps II subscribed as lead order in the Concurrent Placement, for approximately C$6.6 million for 25,552,380 Common Shares, representing approximately 9.99% of the issued and outstanding common shares of Defense Metals upon completion of the Offering. In consideration for RCF Opps II agreeing to subscribe as lead order in the Concurrent Placement, RCF Opps II was granted the right to participate in subsequent equity or debt financings of the Company on a pro rata basis based on RCF Opps II’s ownership stake (determined on a partially diluted basis immediately prior to the proposed financing), while RCF Opps II’s ownership in the Company is greater than or equal to 5% (determined on a partially diluted basis).

The Company intends to use the net proceeds of the Offering to advance the Company’s wholly-owned Wicheeda Rare Earth Elements Project including: (i) the completion of the ongoing pre-feasibility study work; (ii) regional exploration activities; and (iii) general working capital and corporate expenses.

The Common Shares of the Company have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act“), or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there by any sale of the securities referenced in this press release, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Qualified Person

The scientific and technical information contained in this news release has been reviewed and approved by Kristopher J. Raffle, P.Geo. (B.C.), Principal and Consultant of APEX Geoscience Ltd. of Edmonton, Alberta, who is a director of Defense Metals and a “Qualified Person” as defined in National Instrument 43-101.

About the Wicheeda REE Property

Defense Metals 100% owned, 4,262-hectare (~10,532-acre) Wicheeda Light REE property is located approximately 80 km northeast of the city of Prince George, British Columbia; population 77,000. The Wicheeda REE Project is readily accessible by all-weather gravel roads and is near infrastructure, including hydro power transmission lines and gas pipelines. The nearby Canadian National Railway and major highways allow easy access to the port facilities at Prince Rupert, the closest major North American port to Asia.

The 2021 Wicheeda REE Project Preliminary Economic Assessment technical report outlined a robust after-tax net present value (NPV@8%) of $517 million and an 18% IRR¹. This PEA contemplated an open pit mining operation with a 1.75:1 (waste:mill feed) strip ratio providing a 1.8 Mtpa (“million tonnes per year”) mill throughput producing an average of 25,423 tonnes REO annually over a 16 year mine life. A Phase 1 initial pit strip ratio of 0.63:1 (waste:mill feed) would yield rapid access to higher grade surface mineralization in year 1 and payback of $440 million initial capital within 5 years.

About Defense Metals Corp.

Defense Metals Corp. is focused on the development of its 100% owned Wicheeda Project that contains Rare Earth Elements that are commonly used in the defense industry, national security sector and in the production of green energy technologies, such as, rare earths magnets used in wind turbines and in permanent magnet motors for electric vehicles.