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Clean Air Metals Announces Closing of $11.5 Million Bought Deal Private Placement

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Clean Air Metals Inc.  (TSX-V: AIR) (FRA: CKU) (OTCQB: CLRMF)  is pleased to announce that it has closed the previously announced bought deal private placement for total proceeds of approximately $11.5 million, consisting of (i) 11,904,800 flow-through shares at a price of $0.42 per FT Share; and (ii) 12,745,100 flow-through units at a price of $0.51 per FT Unit, including the exercise of the underwriters’ option. In connection with the Offering, Paradigm Capital Inc. acted as sole bookrunner and lead underwriter, on behalf of a syndicate of underwriters including Clarus Securities Inc. and Echelon Wealth Partners Inc.


Each FT Unit consists of one common share of the Company and one-half of one common share purchase warrant of the Company that each qualifies as a “flow-through share” (within the meaning of subsection 66(15) of the Income Tax Act (Canada). Each Warrant will entitle the holder thereof to acquire one common share of the Company at a price of $0.55 until February 23, 2023.


The Company will use an amount equal to the gross proceeds received by the Company from the sale of the FT Shares and the FT Units to incur eligible “Canadian exploration expenses” that will qualify as “flow-through mining expenditures” as such terms are defined in the Income Tax Act (Canada) related to the Company’s projects in Canada. All Qualifying Expenditures will be renounced in favour of the subscribers of the FT Shares and FT Units effective December 31, 2021.


As consideration for the services provided by the Underwriters in connection with the Offering, the Underwriters received: (a) a cash commission of $660,000.42, which is equal to 6.0% of the gross proceeds of the Offering (other than in respect of sales to those persons on the “President’s List” on which the cash commission was 3.0%); and (b) an aggregate of 1,172,970 compensation options, which is equal to 5.0% of the number of securities sold under the Offering (and reduced to 2.5% with respect to certain subscribers on the President’s List). Each Compensation Option is exercisable to acquire one common share of the Company, issued on a non-flow through basis at a price of $0.42 per Compensation Option Share until February 23, 2023.


Abraham Drost, the Chief Executive Officer and a director of the Company, Kelsey Chin, the Chief Financial Officer of the Company, and Jim Gallagher, MaryAnn Crichton, Dean Chambers and Ewan Downie, directors of the Company, subscribed for an aggregate of 820,300 FT Shares under the Offering on the same terms as arm’s length investors. The participation of Abraham Drost, Kelsey Chin, Jim Gallagher, MaryAnn Crichton, Dean Chambers and Ewan Downie in the Offering constitutes a “related party transaction” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“).


The Company is exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the Offering in reliance on sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of the securities issued to Abraham Drost, Kelsey Chin, Jim Gallagher, MaryAnn Crichton, Dean Chambers and Ewan Downie nor the fair market value of the consideration for the securities issued to Abraham Drost, Kelsey Chin, Jim Gallagher, MaryAnn Crichton, Dean Chambers and Ewan Downie exceeds 25% of the Company’s market capitalization as calculated in accordance with MI 61-101. The Company did not file a material change report containing all of the disclosure required by MI 61-101 more than 21 days before the expected closing date of the Offering as the aforementioned insider participation had not been confirmed at that time and the Company wished to close the Offering as expeditiously as possible.


All securities issued in connection with the Offering are subject to a statutory hold period under Canadian Securities Laws until June 24, 2021. The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.


The Offering remains subject to certain conditions, including, but not limited to, the receipt of all necessary approvals including the final approval of the TSX Venture Exchange.


Management Comments


Abraham Drost, CEO of Clean Air Metals stated that, “we are very pleased to confirm the successful closing of the financing. Drilling with two drills has recommenced at the Escape Lake deposit. The program is focused on systematic step-outs to build additional tonnage and grade following up on the Escape Lake deposit and mineral trend identified in the new mineral resource announced January 20, 2021,


The Company plans to add a third drill to the Current Lake deposit in order to focus on resource infill drilling. The Company is targeting completion of a Preliminary Economic Assessment on the Current Lake Deposit in June, 2021. ThePEA will be based on the recent mineral resource numbers and on bench-test scale metallurgical test work on a drill-derived mini bulk sample by Blue Coast Research in Victoria, BC. This work is progressing under the supervision of Nordmin Engineering Ltd. as previously disclosed (August 11, 2020).


The Company is also testing a number of promising new geophysical targets in the search for the source of massive sulphide mineralization that has been documented in the Current Lake Deposit.


Qualified Person


Mr. Allan MacTavish, P.Geo. a Qualified Person under National Instrument 43-101 and an employee of the Company, has reviewed and approved all technical information in this press release.


About Clean Air Metals


Clean Air Metals’ flagship asset is the Thunder Bay North Project, a platinum, palladium, copper, nickel project located near the City of Thunder Bay, Ontario and the Lac des Iles Mine owned by Impala Platinum Holdings. The Clean Air Metals project hosts the Current Lake Deposit and magma conduit and the Company is actively exploring the Escape Lake Deposit, a twin structure to the Current Lake Deposit. Executive Chairman Jim Gallagher, P.Eng. and CEO Abraham Drost, P.Geo. lead an experienced team of geologists and engineers who are using the Norilsk magma conduit stratigraphic and mineral deposit model to guide ongoing exploration and development studies. As the former CEO of North American Palladium Ltd. which owned the Lac des Iles Mine prior to the sale to Impala Platinum in December, 2019, Jim Gallagher and team are credited with the mine turnaround and creation of significant value for shareholders.


Posted February 23, 2021

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