Bunker Hill Mining Corp. (CSE: BNKR) (OTCQB: BHLL) is pleased to announce that the Company has closed the private placement of 37,849,325 special warrants, previously announced on March 9, 2022, and concurrent non-brokered private placement of 1,471,644 units of the Company for aggregate gross proceeds of approximately $11,796,297. The Special Warrant private placement and concurrent non-brokered private placement are unrelated to the separately announced issuance of 10,416,667 Units to a subsidiary of Teck Resources Limited, priced at C$0.30, as announced in the Company’s news release of March 31, 2022. On a combined basis, including the Offering and assuming the closing of the Teck Issuance, the Company expects to issue a total value of C$14,921,297 in securities of the Company.
Pursuant to the Offering, the Company issued 37,849,325 Special Warrants at a price of $0.30 per Special Warrant. Each Special Warrant shall be automatically exercisable (without payment of any further consideration and subject to customary anti-dilution adjustments) into one unit of the Company on the date that is the earlier of: (i) the date that is three (3) business days following the date on which the Company has obtained both (A) a receipt from the Canadian security commission in each of the each of the provinces of Canada which the purchasers and Agents (as defined herein) are residents where the Special Warrants are sold for a (final) short-form prospectus qualifying the distribution of the common stock of the Company and common stock purchase warrants of the Company issuable upon exercise of the Special Warrants; and (B) notification that the registration statement, under U.S. securities laws, of the Company filed with the United States Securities and Exchange Commission has been declared effective by the SEC; and (ii) the date that is six months following April 1, 2022.
Each Brokered Unit consists of one Common Share and one Warrant. Each whole Warrant will entitle the holder to acquire one Common Share (a “Warrant Share”) for C$0.37 until April 1, 2025. The Warrants shall also be exercisable on a cashless basis in the event the Registration Statement has not been made effective by the SEC prior to the date of exercise.
In addition, pursuant to the Offering the Company issued 1,471,644 Non-Brokered Units at a price of $0.30 per Non-Brokered Units. Each Non-Brokered Unit consists of one Common Share and one Warrant. Each whole Warrant will entitle the holder to acquire one Warrant Share for C$0.37 until April 1, 2025.
The offering of Special Warrants was led by Echelon Wealth Partners Inc. and included BMO Nesbitt Burns Inc. and Laurentian Bank Securities Inc. In connection with the Offering, the Agents and other eligible parties received (i) a cash commission in the amount of $563,968; and (ii) compensation options exercisable to acquire an aggregate of 1,879,892 units of the Company at the Offering Price until a date that is of 24 months following the Closing Date.
Each Compensation Unit consists of one Common Share and one Warrant. Each Warrant entitles the holder thereof to acquire one Warrant Share at a price of $0.37 per Warrant Share until April 1, 2024.
The Company will use its commercially reasonable efforts to obtain a receipt for the Qualification Prospectus in each of the Qualifying Jurisdictions, and will file and use its commercially reasonable efforts to have the Registration Statement deemed effective by the SEC, within six months following the Closing Date.
The Company intends to use the net proceeds of the Offering to fund the restart and development at the Company’s Bunker Hill Mine, for the outstanding payment due to the US Environmental Protection Agency, and for general corporate purposes.
The Teck Issuance remains subject to, among other things, required regulatory and stock exchange approvals. There is no guarantee that the Teck Issuance will close or close on the terms previously described or anticipated.
The securities have not been, and will not be, registered under the 1933 Act or any U.S. state security laws, and may not be offered or sold in the Unites States without registration under the U.S. Securities Act and all applicable state securities laws or compliance with requirements of an applicable exemption therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the Unites States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Related Party Transaction
Pursuant to the Offering, certain directors and officers of the Company acquired 4,809,160 Special Warrants. This issuance of Special Warrants to the Insiders in connection with the Offering is considered a “related party transaction” as such term is defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements provided under MI 61-101 on the basis that the issuance of the Special Warrants to insiders in connection with the Offering does not exceed 25% of the fair market value of the Company’s market capitalization. The issuance of Special Warrants under the Offering to the Insiders has been approved by the Board of Directors of the Company who considered the insiders’ interests in the Offering and the best interests of the Company.
The Company did not file a material change report disclosing the related party transaction more than 21 days before the expected closing date of the Offering as the details of the Offering and the participation therein by each insider of the Company were not settled until shortly prior to the closing of the Offering.
ABOUT BUNKER HILL MINING CORP.
Under new Idaho-based leadership the Bunker Hill Mining Corp, intends to sustainably restart and develop the Bunker Hill Mine as the first step in consolidating a portfolio of North American mining assets with a focus on silver. Information about the Company is available on its website, www.bunkerhillmining.com, or within the SEDAR and EDGAR databases.
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